Karachi: The KSE-100 index experienced a significant decline over the past week, dropping by 4,817 points as geopolitical tensions between Iran and the United States intensified. Investor sentiment was further affected by escalating conflict between the Iran-backed Houthis and Saudi Arabia, raising concerns over regional stability and potential disruptions to global trade. Concurrently, Brent crude oil prices surged above $100 per barrel.

According to JS Global, domestic factors also contributed to the negative market trend. Fuel prices in Pakistan continued to rise, with petrol increasing by Rs25 per liter to Rs370.8 per liter and high-speed diesel (HSD) prices climbing by Rs20 per liter to Rs398.04 per liter. In contrast, remittances for August 2026 showed a 17% year-on-year increase to $3.65 billion, with cumulative remittances for the first two months of the fiscal year 2027 reaching $7.2 billion, marking a 15% year-on-year growth.

The government has decided to reduce the refinery crack margin for HSD from $41 per barrel to $30 per barrel during wartime conditions. Meanwhile, consultations with the International Monetary Fund (IMF) are expected to commence next week, as the draft Auto Policy for 2026-31 awaits final approval. The State Bank of Pakistan's reserves increased by $1.2 billion over the week, now totaling $18.3 billion.