Karachi, July 1, 2025: The Pakistan Stock Exchange (PSX) opened the new fiscal year on a historic note, continuing its record-breaking rally fueled by improved macroeconomic indicators, falling interest rates, and investor confidence following fiscal clarity.
The benchmark KSE-100 Index surged by 2,572.11 points, or 2.05%, to close at an all-time high of 128,199.42 — marking the first time it has crossed the 128,000 level. Intraday, the index reached a peak of 128,475.69, gaining as much as 2,848.38 points (2.27%), while the session’s low was recorded at 126,113.27.
“Aggressive buying by local investors has pushed the KSE-100 Index past 128,000, reflecting over 2% gains in a single day,” said Mohammad Sohail, CEO of Topline Securities. “The rally is supported by post-budget clarity and declining interest rates, which have encouraged increased equity allocations from domestic players.”
Prime Minister Shehbaz Sharif welcomed the stock market’s performance, calling it a “positive development” for the economy. In a statement via APP, he thanked investors and the business community for endorsing the government’s economic direction.
“The new fiscal year has begun with promising news. The record-breaking KSE-100 Index reflects growing investor confidence in our economy and policies,” he said. He also lauded his economic team, expressing confidence that FY26 would be a turning point in Pakistan’s economic recovery.
The fiscal year 2025 ended with a remarkable 60% year-on-year gain for the benchmark index, which saw a 1,248-point rise on Monday after China rolled over $3.4 billion in commercial loans to Pakistan — a move that reinforced investor confidence in the country’s financial stability.
According to Topline Research, the KSE-100 Index has surged 60% in PKR terms and 57% in USD terms over FY25, ranking it the eighth-best performing stock market globally. Over two years (FY24–25), the index has delivered a cumulative gain of 203% in PKR and 206% in USD, largely supported by macroeconomic reforms and the successful implementation of IMF-supported stabilization measures.
Amreen Soorani, Head of Research at Al Meezan Investment, noted: “This rally is a long-overdue recognition of corporate earnings growth that has been accumulating since 2017 but was previously overshadowed by macro concerns.”
She added that even after a threefold gain in two years, the PSX’s current price-to-earnings (P/E) ratio stands at just 6.3x — below its historical average of 7–8x and significantly under the 10x+ levels seen in earlier boom cycles. “With strong corporate profits and dividends, and continued economic reform, the index has potential to reach around 150,000.”
Other key drivers of the PSX bull run include completion of Pakistan’s first IMF review in March 2025, aggressive monetary easing from 20.5% to 11, fitch’s credit rating upgrade for Pakistan from CCC+ to B- and shifting capital flows from fixed income to equities amid improved market liquidity.
Market analysts believe that with continued policy consistency and investor-friendly reforms, Pakistan’s equity market still has substantial upside in FY26.
