Karachi: Pakistan Stock Exchange witnessed negative activity during the week ending on Friday 17th July 2026. Rising tensions in the Middle East increased uncertainty among investors. Concerns over a possible escalation in the conflict between the United States and Iran, along with fears of disruptions to oil supplies through the Strait of Hormuz, negatively affected market sentiment, especially for oil-importing countries like Pakistan.
The benchmark KSE-100 Index declined by 6,439 points (3.5%) over the week, closing at 175,803 points as investors reduced their exposure to risk.
According to Arif Habib Limited (AHL), higher international oil prices driven by geopolitical tensions weakened investor confidence. The market recorded heavy losses at the beginning of the week, with the KSE-100 Index dropping 2,315 points on Monday and 6,408 points on Tuesday. Although sentiment briefly improved after US President Donald Trump withdrew a proposed 20% transit fee on ships passing through the Strait of Hormuz, renewed concerns over regional stability erased those gains later in the week. Pakistan’s economic indicators presented a mixed picture during the week as Foreign Direct Investment (FDI) dropped sharply by 94% month-on-month, falling to $14 million in June from $214 million in May while current account shifted from a $500 million surplus in May to a $649 million deficit in June.
The automobile sector continued its recovery as Car sales increased 29% month-on-month and 4% year-on-year to 22,741 units in June. During FY26, cumulative vehicle sales reached 206,000 units, representing 33% growth compared to the previous fiscal year. Pakistan’s Large-Scale Manufacturing (LSM) sector showed mixed performance where LSM declined 1% year-on-year in May, however, it increased 1.2% compared to April. During the first 11 months of FY26, the sector recorded an overall 5.8% year-on-year growth.
Country’s Trade figures also remained under pressure as Pakistan’s trade deficit rose 62.4% year on year to US$ 4.7 billion in June 2026, as exports of goods remained $2.3 Billion, while imports increased by 29.4pc to $6.9 billion. For FY26, cumulative trade deficit increased 22% to $39.6 billion putting pressure on Country’s Foreign Exchange Reserves.
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