KARACHI: The Pakistan Stock Exchange (PSX) ended the final session of 2025 on a negative note, as profit-taking interrupted a three-day record-setting rally on Wednesday.

The benchmark KSE100 index dropped by 418.47 points, or 0.24 per cent, closing at 174,054.32.

According to Topline Securities Ltd, investors opted to lock in gains at elevated levels, pushing the index into the red.

Cement stocks led the decline, particularly after DG Khan Cement announced the establishment of a letter of credit for a new 11,000-tonneper-day clinker production line, Pakistan`s largest.

Market participants feared this could prompt price wars if other companies followed suit.

The day`s biggest decliners included LuckyCement, Fauji Fertiliser, National Bank, DG Khan Cement, Cherat Cement, and Fauji Cement, which collectively wiped out 592 points from the index.

Despite the downturn, market participation remained strong, withtrading volumes rising by 12.47pc to 957.23 million shares. However, the traded value dipped by 1.49pc to Rs44.23 billion.

K-Electric led the volume chart with 99.89m shares traded.

Despite the session`sloss, the KSE-100 recorded a 4.43pc monthon-month gain, buoyed by a surprise 50bps rate cut by the State Bank of Pakistan to 10.5pc in December.

Other significant developments in Decemberincluded Saudi Arabia extending its $3bn deposit for another year, a slight dip in November`s CPI to 6.15pc, and a 9pc YoY rise in remittances to $3.2bn.

In its 2025 market performance report, ArifHabib Ltd highlighted the KSE-100 index`s impressive 51pc YoY return, making it the second-best frontier market in dollar terms.

This robust performance follows two consecutive years of doubledigit growth: 55pc in 2023 and 84pc in 2024. Over the last three years, the index delivered a cumulative return of 249pc, the highest among global markets during that period.

Key drivers of the market rally included improved macroeconomic conditions, sustained corporate fundamentals, and increased liquidity. Earnings growth remained strong, with full-year profits expected to increase by 10-11pc.

The year also saw seven IPOs and key mergers and acquisitions, including the PTCL-Telenor deal and Engro`s acquisition of Deodar Towers, and ownership stake sales in Lotte Chemical Pakistan Ltd and Mitchells.