PSX beats property, dollar

Pakistan's equity market delivered one of its strongest performances in recent history during 2025, decisively outperforming most competing asset classes and reinforcing the Pakistan Stock Exchange's (PSX) growing appeal among domestic investors. Market participants attribute the benchmark KSE-100 index's robust performance to a combination of macroeconomic stabilisation and improving investor sentiment. Inflation moderated sharply during 2025, allowing the State Bank to cut its policy rate in phases from elevated levels, thereby improving the relative attractiveness of risk assets. At the same time, foreign exchange reserves strengthened, the current account remained largely contained, and fears of disorderly currency depreciation receded. These developments collectively reduced systemic risk and encouraged investors to reallocate capital to equities.