Karachi: The KSE-100 Index saw a decline of 0.6% over the past week, closing at 167,089 points, as geopolitical tensions involving the United States, Iran, Saudi Arabia, and Yemen affected market sentiment. The Makkah Defence Alliance's agreement on rapid force deployment and fluctuating domestic fuel prices further influenced the index's performance.

According to JS Global, the persistent geopolitical unrest kept Brent crude prices above US$100 per barrel. In Pakistan, fuel price adjustments were mixed, with the price of motor spirit rising by Rs6.20 per litre to Rs398.96, while high-speed diesel fell by Rs3.92 to Rs395.72. On the economic front, Pakistan secured a staff-level agreement with the International Monetary Fund to release US$1.2 billion under the Extended Fund Facility and the Resilience and Sustainability Facility. The IMF emphasized the need for the government to phase out fuel subsidies, broaden the tax base, and ensure timely energy tariff adjustments, highlighting ongoing risks from geopolitical tensions and volatile energy markets.

Additionally, the Finance Ministry reported a 0.5% month-on-month decline in government debt to Rs82.95 trillion in August 2026, although it showed a 7.1% year-on-year increase. In contrast, state-owned enterprise debt rose to Rs10.1 trillion by December 2025. The latest Pakistan Investment Bond auction saw the government raising Rs352 billion, with yields increasing by 26 to 41 basis points across tenors. Meanwhile, the State Bank of Pakistan's reserves remained stable at approximately US$21.5 billion over the week.