Karachi: The KSE-100 Index showed a significant rebound in its final session of the week, closing at 185,098 points, marking a 0.4% increase over the week. The index had been under pressure due to heightened geopolitical tensions in the region. According to JS Global, Pakistan's macroeconomic indicators presented a mixed picture. Large-scale manufacturing (LSM) recorded its eighth consecutive year-on-year growth with a 10.4% increase in November 2025, propelling the cumulative growth for the first five months of the fiscal year 2026 to 6%.

On the external financing front, Pakistan has requested the United Arab Emirates to extend the rollover of US$2.5 billion in deposits for an additional two years. Additionally, the country is seeking a nearly 50% reduction in the financing rate on a US$450 million outstanding loan. The World Bank's latest assessment projects Pakistan's GDP growth at 3.0% for the fiscal year 2026.

In other economic developments, bank lending to the private sector saw a significant year-on-year decline of 79%, amounting to Rs395 billion in the first half of the fiscal year 2026. In contrast, government borrowing remained robust, with a recent Pakistan Investment Bonds (PIB) auction raising Rs546 billion, exceeding the target of Rs450 billion. The cut-off yields for these bonds declined by 59 to 70 basis points across various tenors.

Additionally, the government has reduced profit rates on National Savings Schemes (NSS) by 23 to 50 basis points across different instruments. The automotive sector continued its strong performance, with four-wheeler volumes growing by 31% year-on-year in December 2025, contributing to a 45% growth in the first half of the fiscal year 2026. On the reserves front, the State Bank of Pakistan's holdings increased slightly by US$16 million week-on-week, reaching US$16.1 billion by the end of the week.