Pakistan Stock Exchange July 2025 Wrap-Up: A Strong Start to the New Fiscal Year

The Pakistan Stock Exchange (PSX) carried its historic momentum from June into the new fiscal year with remarkable strength. June had marked the end of FY 2024–25 on an extraordinary note, with the KSE-100 closing at an all-time high of 125,627 points, a record that reflected the combined impact of foreign inflows, IMF support, and an improving macroeconomic outlook. Rather than pausing after such a performance, the market surged ahead in July 2025, as the benchmark index pushed to new levels, peaking at 139,419 points during the month and ultimately closing at 139,390 points. This 13,763 points or nearly 11% gain in just one month underscored that investor confidence was far from exhausted.

Fueling this momentum was a blend of optimism over the government’s reform agenda, positive budgetary measures, and ongoing structural initiatives like the “Uraan Pakistan” program. The rally was not confined to speculative counters alone; heavyweight sectors such as banking, automobiles, and energy attracted serious institutional participation. With steady foreign inflows and expectations of stable policy rates, investors saw July not only as a continuation of the bullish streak but as a strong signal that the market was entering FY 2025–26 on solid footing.

Index Performance: The Headline Story

The KSE-100 Index’s closing at 139,390 points marked one of the highest monthly gains in PSX history. Compared to June’s close of 125,627 points, the index added 13,763 points, reflecting a 10.96% month-on-month increase.

The magnitude of this rise is best understood in its context. At the beginning of 2025, investors were concerned about macroeconomic stability, inflationary pressures, and external sector weakness. By mid-year, however, several factors shifted the landscape.

Firstly, international developments provided a confidence boost. Renewed discussions between Pakistan and the United States, particularly in trade and energy cooperation, reassured investors of potential external support. Secondly, the corporate earnings season began with high expectations from banks, fertilizers, and exploration companies. Finally, macroeconomic signals—such as a current account surplus and easing inflation, created a sense that the economy was stabilizing.

Together, these factors drove the market into record territory. But while the index numbers tell one story, the strength of the market lies equally in the depth of its trading activity.

Trading Activity: The Market’s Pulse

Beyond the index, July’s rally was defined by heightened market participation. Trading volumes and values both surged, reflecting investor conviction.

Volumes rose to 261.5 million shares per day, up 8% from June, while the daily value traded surged 16% to PKR 22.37 billion. This combination of higher volumes and higher values paints a powerful picture. It suggests that investors were not just trading more often, but they were also committing larger sums of money to the market.

Importantly, the breadth of trading activity highlighted that the rally was not confined to a handful of blue-chip companies. Small- and mid-cap stocks saw meaningful activity, confirming that the bullish sentiment was shared widely across the exchange. This broad-based participation is often seen as a marker of a healthier, more sustainable rally rather than one driven by speculation in a narrow set of names.

Most Traded Stocks: Volume Leaders (July 2025)

Trading activity in July was dominated by a familiar set of retail favorites and mid-cap stocks. 

The following table shows the top ten scrips by total volume traded during the month:

The Bank of Punjab (BOP) led the market with more than 1.08 billion shares traded in July, highlighting its status as the most actively traded scrip on the PSX. WorldCall Telecom (WTL) followed with 764 million shares, consistent with its history of being a high-volume penny stock that attracts speculative interest.

Other strong performers included KOSM (489m) and PIBTL (470m), both maintaining their positions as retail favorites. K-Electric (KEL) also remained heavily traded at 441 million shares, reflecting its wide base of investors.

Interestingly, FDPL (320m) entered the top ten list, showing a surge in investor interest. Alongside, HASCOL, TPLP, and IMAGE also remained part of the most traded stocks, confirming that retail-driven counters continue to dominate trading volumes on the PSX.

This breakdown shows that while the KSE-100 Index rally was largely carried by banks and fertilizers, trading activity at the grassroots level was concentrated in a mix of banking, utilities, and speculative retail scrips.

Sectoral Contributions: Banks Lead the Charge

Every strong rally has its leaders, and in July, the banking sector emerged as the driving force.

Banks alone added more than 6,500 points, accounting for nearly half of the total index gains. With expectations of strong earnings, stable policy rates, and attractive dividend yields, banks became the backbone of the rally.

Fertilizer stocks were the second-largest contributors, adding 2,390 points, driven by consistent performance and investor interest in dividend-heavy plays. Meanwhile, the “Others” category—which includes a mix of diversified sectors—contributed more than 4,000 points, underscoring the breadth of market participation.

Negative contributions came from Refinery, Glass, and Leather sectors, but their collective drag of less than 150 points was negligible against the tide of gains.

The Standout Stocks: Gainers and Losers

Within the broader rally, some stocks became star performers, while others lagged behind.

The list of top gainers was dominated by banks. AKBL, BOP, and UBL all gained over 35%, reaffirming the sector’s strength. The top performer, however, was Unilever Pakistan Foods (UPFL), which rose 42% thanks to resilient consumer demand and strong brand equity.

On the other side, YOUW (-15%) and BNWM (-12%) posted the steepest losses, while PKGP, MUGHAL, and PTC also ended the month in the red. These underperformers reflected company-specific challenges rather than broader sectoral trends, as the majority of industries enjoyed strong gains.

Investor Flows: Local Strength vs. Foreign Caution

July 2025 highlighted a striking divide between foreign and domestic investors. 

Foreign Portfolio Investment (FPI) saw a net outflow of USD 32 million, reflecting persistent caution. Exploration & Production (-10.3 m) and Banks (-6.7 m) led the withdrawals, while Cement was the only sector with a modest inflow (+0.5 m).

In contrast, Local Portfolio Investment (LPI) surged, with Mutual Funds (+36.3m) and Individuals (+34.3 mn) leading inflows. Companies and brokers also added support, more than offsetting selling by banks and insurance firms.

This divergence underscores a new trend: local investors now anchor PSX rallies, even as foreigners remain cautious.

Lessons from a Record-Breaking July

July 2025 will be remembered as one of the most powerful months in the history of the PSX. It was not just about numbers but about confidence, conviction, and a turning point in market sentiment. The rally showed that when fundamentals align with investor belief, markets can climb walls of worry.

• At the start of July, optimism began to return, spurred by talk of renewed international collaboration and expectations of strong corporate earnings.
• By mid-month, momentum accelerated as local investors absorbed foreign selling, pushing volumes and values sharply higher.
• By month-end, optimism transformed into euphoria as the KSE-100 surged to 139,390, cementing Pakistan as one of the top-performing equity markets globally.

July 2025 at a Glance

This wasn’t just a liquidity-driven rally — it was broad-based and sector-led. Banks contributed over 6,500 points, followed by Fertilizers and Investment Banks, while losses in Refinery, Glass, and Leather were negligible. Despite persistent foreign outflows, local investors decisively took control, underscoring the resilience of domestic capital.

Investor Takeaway

For long-term investors, July offered a timeless lesson: markets are not only about numbers but about trust and conviction. The PSX showed that even amid global uncertainty and foreign hesitation, local participation can drive historic gains. Investors who stayed disciplined and focused on fundamentals were rewarded with one of the strongest months in recent history. A reminder that patience and confidence often pay off the most.

Conclusion – A Month of Milestones and Momentum

July 2025 will be remembered as a pivotal month for the Pakistan Stock Exchange. From the market brushing against record highs in June to navigating volatility in July, investors witnessed a dynamic mix of opportunity and caution.

The banking sector’s leadership, the chemical sector’s volatility, and the automobile sector’s cautious optimism together painted a vibrant picture of the PSX’s resilience. At the same time, the surge in speculative trading underlined the diversity of investor behavior shaping market activity.

As Pakistan’s economic reforms continue to unfold, the PSX remains a mirror of both challenges and opportunities. If stability holds and investor confidence persists, the market could well be on course for another strong quarter ahead.