Pakistan has emerged as the world’s best-performing equity market in US dollar terms over the past two years, outpacing major regional peers including India and China, according to Bloomberg data.
The KSE-100 Index delivered a remarkable 55.5% return in USD and 58.6% in PKR during FY2024–25, placing Pakistan third globally in single-year FY25 performance but number one in the two-year cumulative rankings. Analysts credit Moody’s credit rating upgrade, ongoing economic reforms, and improving investor confidence for sustaining momentum.
In contrast, India’s BSE Sensex recorded just a 3.2% USD return in FY25, weighed down by tariff hikes, foreign investor outflows, and weaker market sentiment. Tariffs on US-bound goods climbed from 25% to 50%, triggering broad sell-offs and concerns over export competitiveness, particularly in textiles, apparel, jewellery, and footwear.
The market impact has been significant. In August 2025 alone, over $900 million flowed out of Indian equities, following $2 billion in July. Major indices saw consecutive declines, with the Sensex falling over 600 points on multiple occasions. Moody’s and Barclays warn these tariffs could trim India’s GDP growth by 0.3–0.6 percentage points, potentially costing the apparel sector $5 billion in export revenues within seven months.
Pakistan, meanwhile, has benefited from positive geopolitical developments, including a US pledge to assist in developing its vast oil reserves. On July 31, after Washington announced higher tariffs on Indian goods, the KSE-100 rallied by 1.3%, adding roughly 1,800 points.
Experts note that Pakistan’s ability to maintain market leadership in USD terms over two years signals growing resilience and investor optimism, setting it apart in a challenging global environment.
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