Pakistan Stock Exchange’s benchmark KSE-100 index closed at a record high of 71,465 points, up 0.8 per cent, after breaching the key 71,000 level on Monday.

The KSE-100 index gained 631.86, or 0.89 per cent, to stand at 71,541.76 points at 11:38am from the previous close of 70,909.90. The index closed at 71,433.46 points, up by 523.56 points or 0.74pc, from the previous close.

The index has surged 74.3pc over the past year and is up 10.5pc year-to-date.

Pakistan is aiming to agree on the outline for a new International Monetary Fund (IMF) loan on May, and “good March quarter dividends are helping share prices which despite rallying are trading at forward looking price-earning ratio of 4,” said Sohail Mohammed, CEO of Karachi based brokerage company, Topline Securities.

Yousuf M Farooq, director of research at Chase Securities, attributed today’s upward momentum “to media reports of Saudi investment in Reko Diq, the likelihood of Pakistan securing its next IMF programme and projections indicating a sharp decline in inflation and interest rates ahead”.

“Pakistan’s current account is in a positive and stable state, and the economy appears to be on the road to recovery. Persistent adverse economic conditions have resulted in significantly undervalued assets, and the current rally may simply be a reversion to the mean,” he added.

Overall, he said that “strong corporate earnings, good payout announcements and smooth IMF negotiations for a new programme” were key triggers for the rally.

Awais Ashraf, director of research at Akseer Research, echoed the same sentiments. “Investor confidence has improved due to the increasing prospects of Saudi investment in Pakistan and the declining trajectory of inflation,” he said.

Moreover, Ashraf observed interest in heavyweights like Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) “driven by expectations of Saudi investment in Reko Diq and the government’s focus on reforms”.

“Additionally, commercial banks and fertiliser stocks are experiencing positivity in anticipation of higher payouts,” he said.

Shahab Farooq, director of research at Next Capital Limited, credited the bullish momentum to a “relatively stable Middle Eastern situation leading to decline in international crude oil prices”, positive news with regards to a fresh IMF programme and optimism on Saudi investments.

“Healthy results announcements are also contributing to the positive momentum,” he said.