The Pakistan Stock Exchange witnessed a notable decline this week as the benchmark KSE-100 index dropped 3.2%, closing at 165,596 points. The downturn was largely driven by uncertainty surrounding the progress of US-Iran peace negotiations, which negatively impacted investor sentiment.
Throughout the week, the market showed consistent volatility. The KSE-100 index lost a total of 5,520 points, with losses recorded across multiple trading sessions. Analysts highlighted that geopolitical tensions, particularly in the Middle East, played a key role in influencing market behavior.
Despite the downward trend, several domestic economic indicators provided partial support to the market. One major positive development was Pakistan’s successful Panda Bond issuance, which raised $250 million and was oversubscribed multiple times, reflecting strong investor confidence.
Additionally, workers’ remittances showed a positive trend, increasing 11% year-on-year to $3.5 billion in April 2026. Over the first ten months of FY26, remittances rose 8% to $33.9 billion, supporting the country’s external account.
Other economic indicators also presented a mixed outlook. Pakistan’s GDP growth in the third quarter of FY26 was recorded at 3.99%, driven mainly by industrial sector performance. Meanwhile, auto sales surged significantly, increasing 42% month-on-month and 108% year-on-year, highlighting recovery in the automotive sector.
On the fiscal side, the budget deficit stood at Rs856 billion (0.7% of GDP), while tax collections by the Federal Board of Revenue (FBR) increased by 10%. Additionally, the International Monetary Fund (IMF) disbursed $1.3 billion to Pakistan after the country met key economic targets.
Overall, while domestic economic improvements offered some stability, global geopolitical uncertainty continues to weigh heavily on market performance. Investors are expected to remain cautious until there is clearer progress on international peace negotiations.
