Karachi: Market activity on the KSE-100 Index experienced a downturn this week, closing at 159,593 points, marking a 1.3% decline from the previous week. This decrease is attributed to ongoing geopolitical tensions that have dampened investor sentiment.

Economic indicators for October 2025 reveal further challenges. The Consumer Price Index (CPI) stood at 6.2%, surpassing market expectations due to disruptions from recent floods and border closures with Afghanistan. These factors have contributed to an average inflation rate of 4.73% for the first four months of the fiscal year 2026.

The trade deficit also widened significantly, increasing by 56% year-over-year to $3.2 billion in October 2025. This brings the cumulative deficit for the first four months of FY26 to $12.6 billion, driven by a surge in imports to $6.1 billion, the highest level since March 2022, alongside a 4% decline in exports.

In contrast, remittances showed a positive trend, rising to $3.4 billion in October 2025, a 12% increase compared to the previous year. However, the power sector's circular debt swelled by Rs79 billion in the first quarter of FY26, reaching Rs1.69 trillion.

On the fiscal front, the Federal Board of Revenue (FBR) reported a tax collection shortfall of Rs76 billion for October 2025, contributing to a cumulative deficit of Rs274 billion for the first four months of FY26, with total collections amounting to Rs3.84 trillion.

In the latest Pakistan Investment Bond (PIB) auction, the government raised Rs793 billion, with yields increasing by 14-15 basis points for the 2-year, 3-year, and 5-year tenors, while the 15-year tenor saw a decrease of 9 basis points. Meanwhile, the State Bank of Pakistan's reserves grew by $31 million week-over-week, reaching $14.51 billion.