An index is a single number that tracks a basket of shares. Instead of checking hundreds of prices, you can glance at one index and know whether the market, or a part of it, had a good or bad day. The PSX publishes many indices. This lesson covers the ones beginners actually need.
Snapshot at 30 September 2026
| Index | What it tracks | Close | From its high |
|---|---|---|---|
| KSE-100 | 100 large companies, the main benchmark | 169,969 | -10.1% |
| KSE-30 | 30 large, liquid companies | 50,644 | -13.6% |
| KMI-30 | 30 large, liquid Shariah-compliant companies | 243,609 | -10.4% |
| All Share | Every listed company | 102,893 | n/a |
| PSXDIV20 | 20 high-dividend companies | 77,950 | -10.1% |
| BKTI | Banks | 47,136 | -14.9% |
| OGTI | Oil and gas | 34,716 | -12.9% |
Index levels are not comparable with each other. KMI-30 is not "bigger" than KSE-100 because its number is higher; each index started at a different base value on a different date. Compare percentage changes instead.
How index weighting works
Most PSX indices are weighted by free-float market capitalisation. That means:
- Bigger companies move the index more than smaller ones.
- Only the shares available for public trading count. Government or sponsor blocks are left out.
So a 2% rise in a large bank can move the KSE-100 more than a 10% jump in a small textile company. On 30 September 2026, for example, just five stocks (HBL, MEBL, LUCK, FATIMA and FFC) added 311 points to the KSE-100.
KSE-100: the main benchmark
The KSE-100 is the index you hear about on the news. It started at 1,000 points in November 1991.
How companies are chosen:
- The largest company (by free-float market cap) from each PSX sector gets a place, excluding the mutual fund sector.
- The remaining places go to the largest companies overall.
- Companies must also meet minimum trading (liquidity) rules.
- The list is reviewed twice a year.
Because it covers every sector, the KSE-100 is the best single measure of the whole market. According to PSX, it captures roughly 70% to 80% of the market's total free-float value.
KSE-30: the biggest and busiest
The KSE-30 holds 30 large companies that trade actively. It started in 2006 from a base of 10,000 (set at June 2005). Because it holds fewer, bigger stocks, it can move a little differently from the KSE-100.
The KSE-30 has one special job: it triggers market-wide halts. If the KSE-30 moves 5% up or down from the previous close and stays there for five minutes, all trading stops for a while. That happened on 2 March 2026, when trading halted at 9:22 am and resumed at 10:30 am. Lesson 5 explains this.
KMI-30: the Shariah-compliant benchmark
The KMI-30 index (Karachi Meezan Index) tracks the 30 largest and most liquid Shariah-compliant companies on the PSX. It was launched on 2 September 2008 by the then Karachi Stock Exchange with Al Meezan, with a base of 15,000 set at 30 June 2008. It is the main benchmark for Islamic equity funds in Pakistan.
How a stock gets into the KMI-30
A company must first pass Shariah screening. The published criteria are:
| Test | Rule |
|---|---|
| Core business | Must be halal. Conventional banks, insurance, alcohol, gambling and similar businesses are excluded. |
| Interest-bearing debt | Less than 37% of total assets |
| Non-compliant investments | Less than 33% of total assets |
| Non-compliant income | Less than 5% of total revenue |
| Illiquid assets | At least 25% of total assets |
| Net liquid assets | Share price must be at least equal to net liquid assets per share |
From the companies that pass, the 30 largest by free-float market cap that meet liquidity rules make it into the index. It is recomposed twice a year, and companies can move in or out as their financials change.
Large Shariah-compliant names you will often see in or near the KMI-30 include OGDC, MARI, FFC, EFERT and Meezan Bank (MEBL), which is an Islamic bank. Conventional banks like UBL, MCB and HBL are not included. Always check the latest constituent list on the PSX website, because it changes.
KMI All Share Index
The KMI All Share Index, launched in November 2015, includes every Shariah-compliant listed company, not just the top 30. It is the better list if you want to know whether a smaller company passes the screen.
Lesson 8 goes deeper into Shariah-compliant investing, Islamic funds and dividend purification.
All Share Index
The All Share Index includes every listed company. It gives the broadest view of the market but is still dominated by the largest companies.
PSX Dividend 20 Index (PSXDIV20)
Launched in 2022, PSXDIV20 tracks 20 companies with the highest trailing 12-month dividend yield. To qualify, a stock must:
- have traded on at least 90% of trading days in the last six months
- have at least 5% free float
- meet minimum payout tests (at least a 5% payout ratio and dividends of at least 10% of face value)
Stocks are ranked and weighted by dividend yield, and the index is recomposed twice a year. It is useful for income investors who want to see how high-yield stocks are doing. It held up slightly better than the KSE-100 in 2026: it was up 0.4% for the year at the end of September, while the KSE-100 was down about 2%.
Sector indices
PSX also publishes indices for single sectors, such as:
- BKTI: commercial banks
- OGTI: oil and gas
- other sector and thematic indices listed on the PSX website
These help you see which part of the market is driving a move. For example, in the three months to 30 September 2026, both banks and oil and gas fell further than the KSE-100.
Can you buy an index?
You cannot buy the index itself, but you can get close:
- Index funds and ETFs follow an index (for example, there are ETFs tracking KMI-30-based and other PSX indices). ETFs trade on the PSX like shares, though often with low volume.
- Equity mutual funds use an index as a benchmark to compare their returns.
Lesson 11 compares funds and buying shares yourself.
How to use indices as a beginner
- Check the trend, not the daily noise. A 500-point day is normal. A 10% fall over months is a correction.
- Compare your portfolio with the right index. If you own only Shariah-compliant stocks, compare with the KMI-30, not the KSE-100.
- Know whether dividends are included. PSX describes the official KSE-100 as a total return index, meaning dividends and other corporate actions are adjusted into it. In June 2025 PSX launched the KSE-100 Price Return index (KSE100PR), which tracks price changes only. If you compare your own price gains with an index, use the price-return version.
Key points
- Indices summarise the market. Most PSX indices are weighted by free-float market cap, so big companies matter most.
- The KSE-100 is the main benchmark, with the largest company from each sector plus the biggest companies overall.
- The KSE-30 holds 30 large liquid stocks and triggers market-wide halts at a 5% move.
- The KMI-30 index tracks 30 large Shariah-compliant stocks that pass tests on business type, debt, income and assets.
- PSXDIV20 follows high-dividend stocks; sector indices like BKTI and OGTI show which sectors lead.
Next lesson: Order types, lots and trading rules. Follow the KSE-100 and KMI-30 live on our market page.