The benchmark index of the Pakistan Stock Exchange (PSX) extended its gains on Friday as it crossed the 55,000 milestone following a 1,000-point surge, reaching an “all-time high”.According to the PSX website, the KSE-100 index climbed by 800 points or 1.51 per cent from the previous close of 54,261.42 by 10am. Two hours later (by 12pm) the index rose by another 300 points to see a cumulative increase of 1,102.69. The trade volume at the time was 55,364.11.

In a post on X (formerly Twitter), Arif Habib Limited said the index was trading at an “all-time high”. Speaking to Dawn.com, FRIM Ventures Chief Investment Officer Shahbaz Ashraf said the main reason for the rally was the reduction in Pakistan Investment Bonds (PIBs) yields, which had prompted domestic buying. “Besides this, the technical reason is that State Life is the main market buyer. I think majorly, the market is trading at very attractive valuations,” he added.

Yields coming down are a crucial indicator to determine if interest rates are about to ease up. Meanwhile, high yields are often viewed as a sign of a tighter key policy rate, the effect of which can be sluggish economic growth and therefore lower equity returns. Head of equity at Intermarket Securities, Raza Jafri, also attributed today’s run to reducing PIBs yields and strong domestic institutional buying.

He stated that expectations of higher weight for Pakistan in the upcoming review of global index provider MSCI was combining to push up the benchmark index, especially in high dividend yielding stocks. Indices by MSCI help passive investors allocate their funds in a variety of equity markets around the world. On the other hand, Topline Securities chief executive Mohammad Sohail said that even though the KSE-100 index was at an all-time high, the KSE-30 index — which tracks the share prices of top 30 companies, excluding dividends — was still hovering 35pc below its 2017 peak.