Moaaz Manzoor

Pakistan’s stock market recorded a strong recovery in November 2025, with the benchmark KSE-100 Index gaining 5,046 points to close at 166,677, according to the Monthly Economic Update and Outlook for December 2025 released by the Finance Division.

The rally reflected growing investor confidence amid improving macroeconomic indicators, easing inflationary pressures and enhanced stability in the external sector.

The report noted that market sentiment improved significantly during the month as investors responded positively to signs of economic stabilization. The KSE-100’s upward movement was supported by broad-based buying across major sectors, including banking, cement, energy, fertilizers and automobiles. Improved liquidity conditions and expectations of sustained economic recovery contributed to higher trading activity on the Pakistan Stock Exchange.

Market capitalization increased by Rs305 billion during November, reaching Rs18.9 trillion by month-end. The expansion in market value was driven by rising share prices across multiple sectors, indicating growing confidence in corporate earnings and overall economic prospects. The report highlighted that investor participation strengthened as domestic investors responded positively to improving macroeconomic indicators.

According to the Finance Division, the easing of monetary conditions played a central role in boosting market sentiment. The State Bank of Pakistan’s decision to reduce the policy rate to 10.5 percent lowered borrowing costs and supported credit growth, making equities more attractive relative to fixed-income instruments. Improved liquidity conditions also helped stimulate activity in interest-sensitive sectors.

The report further noted that macroeconomic stability strengthened during the period, supported by improvements in the external account and fiscal management. Foreign exchange reserves rose steadily, while the current account position improved on the back of higher remittances and stable export performance. These developments contributed to greater confidence among investors and market participants.

In addition to monthly gains, the report highlighted a strong year-on-year performance of the equity market. By the end of December 2025, the KSE-100 Index had reached 174,472 points, up from 115,259 points a year earlier. Market capitalization also expanded significantly, rising from Rs14.6 trillion to Rs19.7 trillion over the same period, reflecting sustained investor interest and improving economic fundamentals.

The Finance Division stated that continued progress in fiscal consolidation, stable monetary policy and ongoing structural reforms would remain critical to maintaining market momentum. It added that consistent policy implementation, improved governance and a stable macroeconomic environment remain essential for sustaining investor confidence and supporting long-term growth in the capital market.

Credit: INP-WealthPk