Pakistan’s equity market has recorded its highest daily traded value in nearly two decades, with ready-market turnover surging to around Rs85 billion, reflecting strong investor confidence and heightened trading activity at the Pakistan Stock Exchange. The sharp increase in volumes underscores the strength of the ongoing rally and highlights growing participation from institutional investors.
Market participants attributed the spike in trading activity primarily to aggressive buying by local mutual funds. Institutional investors have played a leading role in driving volumes higher, as they continue to reallocate capital from fixed-income instruments into equities. This sustained shift in asset allocation has provided strong liquidity support to the market and contributed to elevated valuations across key sectors.
The movement of funds toward equities has been driven by changing return dynamics in the broader financial market. Declining yields on fixed-income products have reduced their relative appeal, prompting investors to seek higher returns through the stock market. As a result, equities have emerged as a more attractive investment option, particularly in an environment of falling interest rates and improving risk appetite.
Since the start of 2026, Pakistan’s equity market has delivered robust returns, gaining 6.3 percent during the first four trading sessions of the year. The strong early-year performance reflects positive sentiment, sustained institutional participation, and expectations of continued monetary easing, which have collectively supported the market’s upward trajectory.
For context, returns on fixed-income instruments have declined sharply over the past 18 months. Yields that were above 24 percent around mid-2024 have eased significantly and currently stand near the 9 to 10 percent range. This sharp compression in yields has altered the risk-return equation for investors, accelerating the shift toward equities as a preferred asset class.
Analysts noted that the current environment of ample liquidity and lower interest rates has improved overall market sentiment. With borrowing costs easing and macroeconomic conditions stabilizing, investors appear more willing to take exposure to equities, particularly large-cap and fundamentally strong stocks. This trend has supported both market depth and trading volumes.
The surge in daily traded value also signals growing confidence in the equity market’s outlook. Higher turnover is often seen as an indicator of healthy market participation and efficient price discovery, especially when driven by long-term institutional investors rather than short-term speculative flows.
Market observers believe that equities are likely to remain in focus in the near term, provided monetary conditions remain supportive and institutional flows continue. Sustained participation from mutual funds and other domestic investors is expected to play a key role in maintaining momentum and supporting valuations across the market.
The record-high trading value marks a significant milestone for Pakistan’s capital markets, highlighting the depth of the current rally and reinforcing the equity market’s position as a key destination for investment amid shifting financial conditions.
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