KARACHI: The Pakistan Stock Exchange (PSX) extended its historic rally on Tuesday, with the benchmark KSE-100 Index soaring by over 2% to reach an intraday high of 128,149.46 points. This marks another milestone in a fiscal year defined by economic recovery, policy stability, and robust foreign support.
The index gained 2,522.15 points from Monday’s close, while the session’s low of 126,113.27 still reflected a healthy gain of 485.96 points. Investors responded strongly to the fiscal year’s final day of trading, confident in Pakistan’s improving macroeconomic outlook and rising corporate earnings.
“Even after tripling over two years, the PSX is still trading at a price-to-earnings ratio of 6.3x — below its historical average,” noted Amreen Soorani, Head of Research at Al Meezan Investment. “There’s room to grow. With sustained corporate profitability and macro reforms, the index could eventually climb to the 150,000 mark.”
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FY25 Ends with 60% Annual Gain
Tuesday’s surge comes right after the KSE-100 closed the fiscal year 2025 with a remarkable 60% year-on-year gain, settling at a record high on Monday after a 1,248-point leap. Market sentiment turned sharply bullish following news that China had refinanced and rolled over $3.4 billion in commercial loans to Pakistan — easing external financing pressure and shoring up investor trust.
According to Topline Research, the KSE-100 has not only jumped 60% in PKR terms but also appreciated 57% in USD terms during FY25. This performance places Pakistan’s stock market as the eighth best-performing market globally, an impressive feat amid global uncertainty.
The past two years (FY24–25) have seen a staggering cumulative return of 203% in local currency and 206% in USD — a historic run fueled by policy continuity, global support, and economic discipline. Pakistan’s ability to stay on track with its IMF commitments also helped strengthen its standing in international markets.
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IMF Programme, Credit Upgrades
Several key developments contributed to this extraordinary market performance. The successful completion of Pakistan’s first IMF review in March 2025 reassured both domestic and foreign investors about the country’s commitment to reforms. The State Bank of Pakistan’s aggressive interest rate cuts — slashing the benchmark rate from 20.5% to 11% — added more fuel to the rally by improving liquidity and investor appetite for equities.
In addition, Fitch Ratings upgraded Pakistan’s credit score from CCC+ to B-, signaling improving sovereign risk. Macroeconomic indicators — including inflation control, current account balance, and rupee stability — have also trended positively, further strengthening investor sentiment.
As fixed-income returns declined amid rate cuts, investors rotated their capital into the stock market, further accelerating the bull run. With more macroeconomic stability on the horizon and corporate earnings expected to remain strong, analysts see more room for upside in the months ahead.
For now, all eyes remain on how Pakistan manages the momentum — with cautious optimism and a touch of bullish swagger.
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