Abdul Ghani

The Pakistan Stock Exchange (PSX) continued to hit record highs through July and August 2025, reflecting investor confidence in improving macroeconomic fundamentals, according to the Ministry of Finance’s Monthly Economic Update and Outlook for August 2025, shared exclusively with Wealth Pakistan.

The KSE-100 index closed July at 139,390 points after gaining 13,763 points during the month. It went on to hit a historic peak of 150,591 points in the third week of August.

Market capitalization surged by Rs1.46 trillion in July to Rs16.7 trillion. By late August, capitalization had reached Rs17.5 trillion, or $62.2 billion, up 66% from the same period in 2024.

The Finance Ministry attributed the rally to fiscal consolidation, controlled inflation, a stronger external position, and international credit rating upgrades. It said that despite seasonal contraction in broad money supply (M2), the equity market remained resilient.

The report also noted that the policy rate was kept unchanged at 11% in July 2025, as the Monetary Policy Committee weighed inflationary risks from higher energy prices against the need to support growth.

Analysts say the strong performance of the stock market is a reflection of investor optimism over reforms, remittance inflows, and corporate profitability. However, they have cautioned that global shocks and domestic risks such as floods could still affect market sentiment.

Credit: INP-WealthPk