Pakistan Stock Exchange June 2025 Wrap-Up

Introduction: Fear, Hope, and Record Highs

In June 2025, the Pakistan Stock Exchange went through a remarkable shift, starting with uncertainty and caution, and ending with a strong sense of optimism. Investors entered June with memories of a turbulent year still fresh: crippling inflation, volatile exchange rates, and geopolitical shocks had left many wary of taking risks. But by month’s end, the PSX had closed its fiscal year at an all-time high, sending a clear message: resilience was back.

The month started on a somber note, as early June was marked by rising global geopolitical concerns, particularly the growing tensions between Israel and Iran. News outlets reported missile exchanges, fears of further escalation, and the possibility of a broader Middle Eastern conflict. For Pakistani investors, this conflict threatened not only regional stability but the global oil supply chain, which could fuel imported inflation and pressure the rupee. Traders responded the way they often do in times of fear: they sat on the sidelines, trimmed positions, and observed. Foreign investors, in particular, pulled money out of risk markets, selling Pakistani equities to the tune of over USD 37 million in net outflows for the month.

Budget Clarity: A Turning Point for Confidence

Throughout June, investors watched and waited, on edge for the federal budget to be unveiled. In emerging markets like Pakistan, the budget isn’t just a policy document. It’s a confidence signal. Would the government slap new taxes on bank profits? Would it bloat the deficit and scare off the IMF? Or will it leave development spending to wither? These questions loomed large, keeping trading cautious through mid-June.

Despite uncertainties, the newly announced budget offered what investors value most: transparency. It outlined a spending plan of PKR 17.57 trillion, aiming for a fiscal deficit of 3.9% of GDP. Notably, it avoided imposing harsh new taxes on the business sector and indicated a commitment to maintaining development expenditures. For both international lenders and domestic enterprises, the budget signaled stability rather than upheaval.

Investor Psychology: From Crisis to Opportunity

It wasn’t just the government or central bank data that fueled this change—it was the psychology of the market itself. Traders and investors stopped worrying about crisis scenarios and started looking for value. For the first time in months, they saw an environment where real interest rates were positive, corporate earnings might grow sustainably, and the currency wasn’t on the verge of devaluation.

By the last week of June, the rally had gained strong momentum. One of the main reasons was a key diplomatic development in the Middle East — the ceasefire announcements between Israel and Iran, which helped ease the biggest geopolitical concern. International oil prices calmed, and with them, fears of renewed imported inflation. Foreign headlines turned from war talk to cautious optimism.

This surge of relief coincided with strong domestic participation. Even as foreign investors sold over USD 37 million in June, domestic players stepped up. Individuals led the buying, adding over USD 22 million of net inflows, followed by companies, mutual funds, and insurance firms. This showed that local investors were no longer waiting for validation from abroad. They were betting on their own economy, their own stock exchange.

Record-Breaking Finish: All-Time High for KSE-100

By the final trading day of June, the outcome was clear. The KSE-100 Index closed at an all-time high of 125,627 points, up 5% for the month, equivalent to a massive 5,936-point gain in just 30 days. It was the PSX’s best monthly close, not just a random speculative spike but the culmination of stabilizing macro fundamentals, improved policy clarity, and renewed investor confidence.

This wasn’t a narrow rally either. While banks were the clear leaders, the breadth of participation showed in turnover and sector gains. It was a textbook rotation from fear to cautious optimism.

June 2025’s PSX rally was not just a victory for investors but for Pakistan’s broader economy. It told the world: This market is back in play.

Trading Activity: A Sign of Market Depth

Beyond the impressive headline index gain, one of the most encouraging signals in June 2025 was the strength of daily trading activity on the PSX. The rally was not a flash-in-the-pan or a thinly traded speculative spike. It was powered by broad, steady participation across the month.

Throughout June, the average number of shares traded daily stood at 241.82 million. While this was slightly lower than May’s 248.73 million shares, it was still remarkably robust, especially considering the geopolitical noise that dominated early June. The average daily traded value also remained strong at PKR 19.29 billion, down just 2.5% from the previous month.

Average Daily Trading Metrics

This healthy liquidity reassured investors that they could enter and exit positions without excessive price swings. Even as foreign investors sold USD 37.6 million in June, local investors filled the gap. Mutual funds, insurance companies, corporate treasuries, and retail traders all stayed active.

For long-term investors, this showed that June’s rally wasn’t mere speculative froth. The market’s resilience rested on solid turnover and depth, meaning it could absorb shocks and avoid sudden freezes in trading.

Sector Performance: Who Drove the Rally?

While the headline KSE-100 number grabbed attention, sector performance tells the real story. The sector-wise report breaks down which sectors added or subtracted points from the index’s 5,936-point gain.

Sector Contributions to KSE-100 in June 2025

Banks alone delivered over half of the entire index gain. This leadership was no accident. With inflation cooling to ~3.2%, real interest rates turned positive. The budget avoided surprise taxes on bank profits, ensuring that lending spreads could remain strong. As the rupee began to stabilize, concerns about unexpected currency-related losses on loan portfolios started to fade. Investors rewarded this clarity. Following months of avoiding bank stocks over concerns about non-performing loans and policy uncertainty, June saw a clear shift back into the sector.

Fertilizers rallied on stable margins and dividend appeal, while Oil & Gas added 600+ points amid valuation upside. In contrast, Tech and Auto stocks lagged—Tech due to stretched valuations, and Autos from weak demand and high financing costs, pulling the index down by over 150 points collectively.

For portfolio managers, June offered proof that the PSX was returning to fundamental valuation models. It was no longer just a casino of daily trading spikes but a market where careful sector allocation and macro awareness paid off.

Top 10 Most Traded Stocks by Volume: Where the Action Was

Aside from sector shifts and institutional activity, what truly stood out at the PSX in June 2025 was the heavy trading volume concentrated in a handful of stocks.

June’s average daily volume of ~242 million shares was not spread evenly. Instead, a handful of symbols captured the lion’s share of interest, especially among retail traders drawn to liquidity and price action.

These most traded stocks often had two things in common: very low prices and speculative interest. They were the darlings of day traders and short-term punters looking to profit from even minor price movements magnified over huge share counts.

The top 10  Actively Traded Stocks by Volume in June 2025

Yet while these stocks offered liquidity, they didn’t necessarily lead the index higher. Much of the activity was churn—day traders buying and selling for slim margins rather than long-term investors building positions.

Top Movers: Gainers and Losers in Focus

The final trading session of June produced dramatic moves on several fronts.. The swings, coming on the heels of the month-end revival, highlight both the volatility and opportunity that defined PSX in June.

Biggest daily movers:

These lists highlight the volatility that remained under the market’s surface. Even in a month when the KSE-100 climbed over 5,900 points, traders could lose 10% in a single day if they picked the wrong stock. Conversely, disciplined short-term traders found rich opportunities to ride strong intraday or daily trends.

Investor Flows and Sentiment: Who Was Buying?

The last question was: Who was behind the buying spree?

Foreign investors weren’t the heroes of June. Data showed they were net sellers of USD 37.6 million during the month. Much of this was defensive selling in the early weeks amid geopolitical uncertainty.

But the slack was picked up—and more—by local investors.

Net Investor Flows in June 2025

This flow breakdown tells a clear story. Local individuals were the single largest net buyers, showing faith in their own market despite foreign caution. Corporations and mutual funds also injected new capital, which helped ease the selling pressure.

Conclusion: Lessons from a Historic Month

The PSX saw significant gains throughout June 2025. It was a test of market psychology. It reminded investors that prices aren’t just about earnings or macro data—they’re about narrative.

• At the start of June, the mood was dominated by fear, driven by war-related news, foreign capital outflows, and lingering anxiety from the previous year’s inflation.
• By mid-June, it shifted to relief as the budget proved responsible and inflation collapsed.
• By month-end, it transformed into optimism, with geopolitical calm and strong local buying pushing the KSE-100 to all-time highs.

June 2025 at a Glance

This wasn’t just a speculative rally. It was broad-based. Banks led the index higher with over 3,000 points of contribution, thanks to improving interest rate dynamics and policy clarity. Fertilizers and E&Ps added fundamental support. Despite foreign investors pulling out, local participants more than made up for the shortfall.

Investor Takeaway:

For long-term investors, June served as a reminder that strong markets often emerge from tough times. It showed the importance of watching macro signals, understanding policy moves, and recognizing when fear has overcorrected valuations.

Looking Ahead

As July begins, the question is: can this momentum continue?

Much will depend on whether inflation remains anchored, the rupee stays stable, and the government executes its budget responsibly. Investors are also expected to keep a close eye on the ongoing IMF negotiations.

But one thing is clear: June’s revival wasn’t built on sand. It reflected real macro improvement and a return of local investor confidence. For the first time in a long while, the PSX offered not just hope but a foundation for sustainable gains.