Pakistan celebrates Independence Day: Here's how its stock market performed in last one year

Pakistan celebrates its 80th Independence Day today, capping a volatile year for its stock market amid geopolitical tensions in the Middle East and with Afghanistan. Despite the turbulence, the benchmark KSE-100 index has managed to deliver a 23% return over the past year.

Pakistan’s benchmark KSE-100 index closed marginally lower at around 1,80,105 points yesterday, with the stock market closed today on account of Independence Day. After touching an all-time high of 1,91,033 points in January 2026, the index has since fallen around 6%.

The stock market across the border saw a sharp surge earlier this year as it ramped up its efforts to broker a peace deal between Iran and the US. While an interim peace deal spiked hopes for prolonged peace, fresh escalations dampened sentiment.


The United States has now threatened to keep a naval blockade of Iran in place indefinitely, renewing concerns over crude supplies. The move came a day after oil prices fell on a weaker outlook for global demand. This comes as Iran continued to restrict traffic through the Strait of Hormuz, a key oil transit route that carried 20% of the world's oil before the conflict. The disruption has pushed up fuel prices and increased pressure on US President Donald Trump to bring an end to a war that remains unpopular at home.

Talks between Iran and the United States to end the war in the Gulf have remained stalled, keeping oil prices elevated. Trump said the US had "total control" of the strait, while negotiations between Washington and Tehran appeared deadlocked as both sides hardened their positions. This is further increasing worries for Pakistan, and its investors on stock market.

Pakistan's Gen Z pouring into stock market

Pakistan's Gen Z represented 41% of the new accounts opened in the PSX during fiscal year 2025-26 even when investment by the cash-strapped country's investor population stood at less than 0.2% compared to neighbours, stock managers told PTI in June.

While Pakistan Stock Exchange (PSX) has been one of the top performing stock exchanges in the region despite the Middle East conflict, it still lags behind India and Bangladesh when it comes to the percentage of investments made by Pakistan's total population, a senior official at the PSX said.

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"For many, the stock market now represents a powerful wealth multiplier and we have set a target to reach 2.5 million new Pakistani investor accounts in the next two years," said Aamir Mushtaq Kanju, PSX's Deputy General Manager and Lead, Product Management and Research.

Earlier, Pakistan was on the brink of defaulting on its external debt payments in 2023 with inflation also surging to a record 38% but an IMF package has eased concerns and also seen growing stability and even a surge in the stock market performance.

The Pakistan Economic Survey (PES) for FY26 unveiled on June 11 showed that the GDP grew by 3.7% but missed its growth target due to external shocks. While presenting the country’s annual budget 2026-27, which saw a hike in defence spending by 17.6% to PKR 3,000 billion, marking a significant increase from last year, Minister for Finance and Revenue Muhammad Aurangzeb said the total federal budget is estimated at PKR 18,771 billion and the "GDP growth target is 4%."

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(With inputs from agencies)

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