Karachi: The KSE-100 Index ended its winning streak this week, experiencing a 1.7% decline as it closed at 182,241. This downturn, equating to a drop of 3,130 points, was largely attributed to renewed geopolitical tensions following recent US-Iran strikes, which have affected investor confidence.

According to JS Global, the geopolitical developments also led to a 4.7% increase in Brent crude prices, bringing them to $75.5 per barrel. In macroeconomic news, Pakistan saw its remittances reach a record $41.6 billion in the fiscal year 2026, marking a 9% increase year-over-year. Despite this, the State Bank of Pakistan (SBP) has announced an end to incentive payments to banks on home remittances starting July 2026.

The Asian Development Bank (ADB) adjusted its economic expectations for Pakistan, lowering the GDP growth forecast for fiscal year 2027 from 4.5% to 3.7% and raising the inflation outlook due to increased food and energy prices amid ongoing regional conflicts. The country's government debt has risen to Rs82 trillion as of May 2026.

In financial developments, the government plans to issue its first dollar-settled, rupee-linked bonds, along with new Eurobond and Sukuk offerings. Concurrently, Pakistan and the United States have engaged in negotiations in Washington concerning a prospective reciprocal trade agreement, with a focus on tariff reductions.

Additionally, in the latest Treasury bill auction, the government successfully raised Rs1.92 trillion, with cut-off yields declining across all tenors. The SBP's foreign exchange reserves also saw an increase of $1.9 billion week-on-week, reaching a total of $18 billion.