The study analysis the asset pricing mechanism by using Capital Assets Pricing Model and Fama and Macbeth (1973) asset pricing methodology for the non-financial stocks in equity market of Pakistan. The monthly data for size premium, value premium, macroeconomic uncertainty and political risk is taken from June 2005 to June 2018. The result of single factor model indicates that market is positive and significant for all portfolios. Whereas, by employing Fama and French model increase the predictability of explanatory variables. The regression analysis shows that size premium has positive and significant impact on small portfolio while, it has significant but negative association with returns of big stock. Furthermore, the findings suggest that value premium is significant and negative for high book to market stock. The results also reveal that macroeconomic uncertainty has not shown any significant impact on portfolio returns. There is also a worth mentioning that political risk has shown negative and significant impact for all stocks except B/L. Results concluded that political uncertainty effect is present in equity market of Pakistan. These findings are robust with many previous studies. Theses empirical evidence are warrant that the investor should consider these risks before making any investment decision. Supervisor:- Dr. Saud Ahmed Khan