Karachi: The KSE-100 index extended its upward trajectory this week, rising by 3.2% week-on-week, which equates to an increase of 5,800 points. The gains were largely attributed to improved investor confidence following positive developments in the ongoing negotiations between the United States and Iran.

According to JS Global, the week also saw a decrease in Brent crude prices to $71.8 per barrel, contributing to the market's positive momentum. On the macroeconomic front, the State Bank of Pakistan reported the consumer price index (CPI) inflation for June 2026 at 11.1% year-on-year, resulting in an average inflation rate of 7.04% for the fiscal year 2026. Despite these gains, Pakistan's external sector faced challenges, with the trade deficit widening by 57% year-on-year to $4.5 billion in June 2026. This brought the total fiscal year 2026 trade deficit to $39.4 billion, marking a four-year high, driven by a 6% decline in exports and an 8% increase in imports.

On the fiscal side, the Federal Board of Revenue achieved its revised tax collection target for the fiscal year 2026, amassing approximately Rs13.0 trillion against a target of Rs12.98 trillion. Meanwhile, the central government debt grew by 5% year-on-year, representing the slowest debt accumulation rate in 15 years. In related news, Barclays upgraded Pakistan's sovereign debt rating to 'Overweight', citing a more favorable outlook on oil prices. Moreover, the government raised Rs615 billion in the latest Pakistan Investment Bonds auction, with cut-off yields declining by 47 to 70 basis points across various maturities. The State Bank of Pakistan's foreign exchange reserves also increased by $611 million to $16.53 billion, bolstered by inflows from multilateral institutions.