The KSE-100 index explained: how Pakistan's stock market benchmark works
What the KSE-100 measures, how it is calculated, which sectors carry the most weight, how it differs from the KSE-30, KMI-30 and All Shares index, and what moves it.
By the Nafa team · Updated · 5 min read
The KSE-100 is the most-watched number on the Pakistan Stock Exchange. When the news says "the market rose 900 points today", it means the KSE-100. Here is what it measures, how it is built and what moves it.
What the KSE-100 is
The KSE-100 is PSX's main benchmark. It follows the share prices of 100 of the largest listed companies, chosen so that each sector is represented and the rest are picked by size. It began in November 1991 at a base value of 1,000 points; the change since then measures how much the value of those companies has grown, in rupees.
The live level of the index, and of PSX's other indices, is published on the PSX data portal.
How it is calculated
The KSE-100 is weighted by free-float market capitalisation:
- Each company counts in proportion to the market value of its free float: the shares that actually trade, multiplied by their price.
- Shares held by the government, by founding families and by other long-term strategic owners are left out.
- So larger companies, with more shares in public hands, move the index more than smaller ones.
A 2% rise in a large bank moves the index far more than a 2% rise in a small textile mill. PSX reviews the list of companies twice a year; companies join and leave as their size and trading change.
Which sectors carry the most weight
The index is concentrated in a handful of sectors:
- Commercial banks, usually the largest weight. See banking stocks on PSX.
- Oil and gas exploration, led by OGDC, PPL and MARI. See oil and gas stocks on PSX.
- Fertiliser, led by FFC and Engro Fertilizers.
- Cement, led by Lucky Cement. See cement stocks on PSX.
- Power generation, led by Hub Power.
Because of this concentration, a sharp move in banks or oil and gas moves the whole index. Knowing what drives those few sectors explains most of what the index does. Each sector page on Nafa lists its companies by market cap.
KSE-100, KSE-30, KMI-30 and All Shares
PSX publishes several indices:
| Index | What it follows |
|---|---|
| KSE-100 | 100 large companies, with every sector represented. The main benchmark. |
| KSE-30 | The 30 largest, most heavily traded companies, by free float. Fewer companies, so a few large ones carry more weight. |
| KMI-30 | The 30 largest, most heavily traded Shariah-compliant companies. The benchmark for Islamic funds. See Shariah-compliant stocks on PSX. |
| All Shares | Every listed company. The broadest measure of the market. |
For most purposes, the KSE-100 is the one to follow.
How it has behaved over time
The KSE-100 has gone through long rises and sharp falls, usually in step with Pakistan's economy:
- 2002 to 2007: a long rise during a period of economic reform and growth.
- 2008: a steep fall in the global financial crisis.
- 2012 to 2017: a rise to new highs.
- 2018 and 2019: a fall during a currency crisis, rising interest rates and political uncertainty.
- 2020: a sharp fall when COVID-19 arrived, and a recovery later that year.
- 2024 and 2025: a strong rise as an IMF programme was agreed and interest rates came down.
The pattern repeats: stress in the economy brings sharp falls, and the index has recovered over the years that followed. That is a description of the past, not a promise about the future.
What moves the KSE-100
- Interest rates. When the State Bank of Pakistan raises its policy rate, savings and bonds pay more and borrowing costs companies more, so shares usually fall. When it cuts the rate, shares usually rise.
- The rupee. A weaker rupee hurts companies that import what they sell or owe money in dollars, such as some power and pharmaceutical companies, and helps exporters such as textiles and IT.
- Company results. Each results season moves individual shares and the mood of the whole market. Nafa lists the latest financial results on PSX.
- Politics and policy. Uncertainty pushes prices down; markets tend to recover as it settles.
- The world outside. Oil prices, global investors' appetite for risk and progress on IMF reviews all play a part.
Common mistakes
- Reading the index as advice on a single share. The index can rise while many shares fall, and the other way round.
- Trading every swing. Day-to-day moves in the index are hard to predict, and every trade carries charges.
- Ignoring price. The market as a whole can be cheap or expensive. Comparing the index's overall P/E ratio with its own history gives a sense of which.
Index history is from PSX. Past performance is not a guide to future returns.
