The KSE-100 index is the main benchmark used to measure the performance of the Pakistan Stock Exchange. It tracks 100 of the largest and most actively traded companies listed on the exchange. The index was created to give investors a clear view of how the overall market is moving, rather than focusing on individual stocks. It includes companies from a wide range of sectors, which helps reflect the broader economy.

The selection of companies is based largely on market capitalisation, but trading activity also matters. This means the index represents firms that have size and liquidity. Because of this structure, the KSE-100 gives a good sense of how investors feel about Pakistan’s economic outlook. When the index rises, it usually shows growing confidence. When it falls, it can signal caution or uncertainty.

The index is reviewed periodically to ensure it stays accurate and relevant. Companies can be added or removed depending on changes in their value and trading volume. This keeps the index aligned with current market conditions.

Investors use the KSE-100 to track long-term trends, compare portfolio performance, and study market cycles. It also serves as a reference point for mutual funds and institutional investors. For anyone following Pakistan’s financial markets, the KSE-100 is the most reliable way to understand overall market direction and strength.