KARACHI: In continuation of the record-setting streak, bulls tightened their grip on the stock market as the KSE-100 index rose 2.98 per cent on Thursday, storming past three psychological barriersinonegoonthebackof aggressive institutional buying fuelled by economic optimism.

The index surged 3,241.65 points to hit an intraday record high at 108,345.99. However, it settled at 108,238.97, postingthe thirdlargestsingleday point-wise rally of 3,134.63 day-on-day.

Topline Securities Ltd Chief Executive Mohammed Sohail attributed the stellar performance to non-stop buying by local mutual funds, which helps local bourses create new records every day. `Billions of rupees in fixed income is being converted into equity funds, forcing local asset management companies (AMCs) to buy aggressively. Fixedincome mutual fund investors realise that their return is now almost half what it used to be due to a sharp fallin interest rate, which is why they are converting funds into equities,` he told Dawn.

Record-breaking volumes underscored theday`s intense trading activity, reflecting broad-based participation across sectors. The rally was predominantly driven by relentless buying from local mutual funds, the primary catalyst for sustaining the bull run.

Blue-chip stocks andhigh-capitalisation sectors spearheaded the advance, with significant contributions from Mari Petroleum, Fauji Fertiliser, Hub Power, United Bank, Pakistan Petroleum, and Lucky Cement, collectively adding 1,303 points to the index.

Ahsan Mehanti of ArifHabib Corporation said rupee stability, falling lending rates, government debt stock and bond yields drove the market to new highs.

`The PSX achieved another milestone as market activity surged to an almost 19-year high, with atraded value of Rs63.0bn ($227m), marking the highest activity in the regular market since April 17, 2006,` according to AHL.

Ali Najib, Head of Sales Insight Securities, said anticipation of further reduction of 200-250bps in the upcoming Monetary Policy Committee meeting on Dec 16, continuous conversion/flow of funds from fixed income to equity market by investors, including high-net-worth individuals and institutional-driven buying kept the investor`s confidence bullish throughout the trading hours.

However, the trading volume was down 5.84pc to 1.64 billion shares while the traded value surged 25.41pc to Rs63.41bn on a day-on-day basis.

Stocks contributing significantly to the traded volume included The Bank of Punjab (163.46m shares), WorldCallTelecom(150.47m shares), Cnergyico PK (86.65m shares), Sui Southern Gas Company (85.05m shares) and Fauji Foods (56.13m shares).