May 5 Pakistan stocks rose for a third straight session on Thursday to hit their highest level in nearly nine months, on continued hopes that the country would soon be upgraded as an emerging market, dealers said.

Pakistan was excluded from the emerging markets index and classified as a higher-risk frontier market after the Karachi Stock Exchange was temporarily closed in late 2008 to prevent investors from withdrawing funds.

The benchmark 100-share index of the Pakistan Stock Exchange closed 1.77 percent, or 623.91 points, higher at 35,941.47, after rising as much as 1.82 percent earlier in the session to its highest level since Aug. 17, 2015.

It has gained nearly 1400 points, or 4 percent, in the past three sessions and is now 530 points away from its record high of 36,471.59 hit on Aug. 6, 2015.

"Market sentiment remained positive on continued hopes of Pakistan's reclassification to MSCI," said Hammad Aman, manager equity sales at Topline Securities.

Habib Bank Ltd gained 4.3 percent, Lucky Cement Ltd rose 5 percent and Oil and Gas Development Co Ltd added 5 percent.

The rupee ended at 104.65/104.70 per dollar, compared with Wednesday's close of 104.67/104.71.

Overnight rates in the money market rose to 5.80 percent from Wednesday's close of 4.50 percent.