KARACHI, July 5, 2025 — The Pakistan Stock Exchange (PSX) witnessed a powerful start to the new fiscal year as the benchmark KSE-100 index skyrocketed by over 6% week-on-week (WoW), marking one of the most sensational market openings in recent history.
According to data compiled by Topline Securities and Arif Habib Limited, the KSE-100 index surged from 125,627.31 points to an all-time high of 131,949.06, posting a weekly gain of 7,570 points or 6.1% WoW. The rally was broad-based, driven by institutional buying as liquidity flowed into equities amid declining yields and increased taxes on fixed-income instruments.
This rally in the index was underpinned by several key macroeconomic developments. Headline inflation for June 2025 dropped to 3.23%, down from 3.46% the previous month, indicating further stabilization. Additionally, the trade deficit narrowed to $2.3 billion, showing a 9% MoM and 3% YoY decline. Most notably, foreign exchange reserves held by the State Bank of Pakistan (SBP) soared by $3.7 billion to $12.73 billion — the second-largest weekly rise on record — largely due to multilateral and commercial inflows.
Sector-wise, the KSE-100 index was buoyed by Commercial Banks (+4,561 points), Fertilizer (+722 points), Technology & Communication (+438 points), Exploration & Production (+401 points), and Pharmaceuticals (+187 points). The top-performing stocks included UBL (+1,597 points), MCB (+653), HBL (+462), and BAHL (+425).
However, some sectors did drag the index slightly, including Cement (-136 points), Glass & Ceramics (-65), Refinery (-6), and Woolen (-1.51). On the scrip-wise negative side, MLCF, LUCK, GHGL, and PIOC shaved off a combined total of over 150 points from the index.
Despite a net foreign outflow of $15.33 million, mainly from Commercial Banks and miscellaneous sectors, local mutual funds and companies stepped in with net purchases of $22.14 million and $12.24 million, respectively. The average daily traded volume surged to 967 million shares (up 31% WoW), while the value traded stood at PKR 41.5 billion, up 33% WoW.
Regulatory developments also played a role. NEPRA slashed electricity tariffs to PKR 31.59/kWh, while OGRA raised gas prices from July 1. Moreover, the government introduced a National Electric Vehicle (NEV) levy, prompting price adjustments in the automobile sector.
Outlook: The bullish momentum is expected to continue as the market eyes new record highs. With the KSE-100 index trading at an attractive forward P/E ratio of 6.8x (versus a 10-year average of 8.0x) and offering a 7.4% dividend yield, analysts recommend exposure to top picks such as OGDC, PPL, PSO, FFC, HUBC, MCB, SYS, and AIRLINK. Investors, however, should stay alert for possible profit-taking sessions in the near term.