Karachi: The KSE-100 Index experienced a substantial upswing this week, rising by 3.8 percent, equivalent to a gain of 6,523 points. This positive momentum was largely attributed to a boost in investor confidence following the signing of the Islamabad Memorandum of Understanding between the United States and Iran, which is intended to reduce regional tensions. The reopening of the Strait of Hormuz and the removal of naval restrictions contributed to a decrease in Brent crude oil prices to $80 per barrel.

According to JS Global, the Pakistani government introduced the FY27 Finance Bill, which includes significant changes such as the abolition of the Super Tax for companies earning up to Rs500 million and a 2 percent reduction in the tax rate for higher-income firms. Additionally, the State Bank of Pakistan (SBP) decided to maintain the policy rate at 11.5 percent during its June 2026 Monetary Policy Committee meeting. The SBP assessed that the recent inflationary pressures were primarily due to increased global oil prices stemming from the Middle East conflict rather than domestic demand.

Furthermore, Pakistan's current account returned to a surplus of $459 million in May 2026, with a cumulative surplus of $255 million for the 11 months of FY26, driven by a surge in remittances. The large-scale manufacturing (LSM) sector also showed promising growth, with a year-on-year increase of 6.1 percent in April 2026, bringing the 10-month LSM output growth for FY26 to 6.44 percent year-on-year. In the latest Pakistan Investment Bond auction, the government successfully raised Rs649 billion, with yields declining across various tenors by 34 to 116 basis points. Meanwhile, the SBP's foreign reserves remained stable at $17.2 billion.