Pakistan stock market posts strongest gains in years, KSE-100 hits record high

Pakistan's stock market delivered one of its strongest performances in recent years during the first nine months of fiscal year 2025-26.

The benchmark KSE-100 Index gained more than 18%, climbing from about 125,600 points to nearly 149,000 points between July 2025 and March 2026, according to the Pakistan Economic Survey 2025-26. The index also hit an all-time high of 189,167 points on Jan. 23, 2026.

What drove the KSE-100's record performance in 2025-26?

The rally was powered by easing inflation, a stable external account, successful IMF program reviews and stronger expectations for corporate profitability.

Domestic investor demand also played a key role, with local buyers absorbing most of the shares sold by foreign investors. These factors combined to lift sentiment and sustain the market's upward momentum through the review period.

The survey said Pakistan's stock market outperformed several major global equity markets during this period, reflecting growing confidence in the country's economic recovery.

Trading activity surged alongside prices, with average daily trading volume rising to more than 1.2 billion shares. That compares with 834 million shares in the previous fiscal year.

Total market capitalization reached PKR 16.5 trillion by the end of March 2026, up nearly PKR 1.3 trillion over nine months.

How did domestic investors shape the Pakistan stock market rally?

Local investors recorded net purchases of PKR 182.6 billion in equities between July and March, absorbing nearly $650 million worth of shares sold by foreign investors.

Companies were the largest net buyers during the period, followed by individual investors. Their sustained demand helped stabilize the market and offset foreign outflows.

How did Pakistan's debt and savings markets perform alongside equities?

Pakistan's debt market continued to expand during the period. The government raised more than PKR 5 trillion through the Pakistan Stock Exchange's debt auction platform since its launch in December 2023. National Savings Schemes drew fresh inflows of PKR 226.7 billion, reflecting continued demand for lower-risk options among investors.

The mutual fund industry also maintained its growth trajectory, with assets under management exceeding PKR 4.5 trillion by December 2025. That figure points to broad-based capital market expansion beyond equities alone.

Market sentiment did soften somewhat in early 2026 due to regional geopolitical tensions, higher global oil prices and foreign selling pressure. Despite those headwinds, the survey said Pakistan's capital markets remained supported by economic stability, regulatory reforms and improving investor confidence across the review period.