Market watch: Stocks bounce back over 600 points, aided by IMF bailout decision

Benchmark index increases 1.6% to settle at 38,504.84


Our Correspondent October 09, 2018
Benchmark index increases 1.6% to settle at 38,504.84. PHOTO: AFP

KARACHI: In line with expectations of a massive rally, the stock market bounced back on Tuesday with a surge of over 1,100 points in early trading, but it closed the day with trimmed gains due to profit-taking at higher levels.

The bourse rose after the government announced its decision that it would approach the International Monetary Fund (IMF) for a bailout package to bridge a huge gap in external financing needs.

The market also got support from the rupee’s plunge against the US dollar as stocks of those companies rose that would benefit from the weaker local currency.

At close, the benchmark KSE 100-share Index recorded an increase of 606.55 points or 1.6% to settle at 38,504.84.

Market watch: Stocks continue to take a hammering as KSE-100 dives 1,328 points

Elixir Securities' analyst Murtaza Jafar said the benchmark index rallied 607 points (+1.6%), cheering government’s decision of approaching the IMF for bailout and the rupee’s slide.

The rupee depreciated by nearly 7% to 133.6 against the greenback, paving the way for a fresh IMF programme.

Jafar said within first hour of trading, the index soared 1,100 points in a bounce-back rally with the emergence of clarity on the economic front. However, profit-taking wiped off more than half the gains, which was followed by a partial recovery.

The index was mainly led by the energy sector (+3.6%), which benefited from a weaker rupee.

On a separate note, Pakistan Petroleum (+4.5%) announced a hydrocarbon discovery in Gulsher-1 well, Digri exploration licence with flows of 1,056 barrels per day of oil, he added.

“We expect the market to remain dull in the near term due to investors’ concerns over economic imbalances and economic slowdown attributable to fiscal and monetary tightening,” the analyst said, adding investors would be keeping a close watch on developments related to the IMF programme.

JS Global analyst Danish Ladhani, in its report, said oil and gas exploration companies, power and financial stocks emerged as top gainers as they cumulatively contributed +490 points to the index.

Stocks battered as KSE-100 loses 1,772 points

Oil and Gas Development Company (+5%) closed at its upper circuit whereas Pakistan Petroleum Limited (+4.49%) and Pakisan Oilfields (+4.82%) closed near their upper price limits. Hubco (+3.35%), Kapco (+1.15%), Habib Bank (+0.73%), MCB Bank (+0.5%) and United Bank (+0.04%) also closed in the green zone.

Overall, trading volumes increased to 225.1 million shares compared with Monday’s tally of 186 million. The value of shares traded during the day was Rs9.8 billion.

Shares of 386 companies were traded. At the end of the day, 202 stocks closed higher, 161 declined and 23 remained unchanged.

Lotte Chemical was the volume leader with 14.17 million shares, gaining Rs0.54 to close at Rs12.79. It was followed by The Bank of Punjab with 10.1 million shares, gaining Rs0.33 to close at Rs10.45 and Azgard Nine with 9.49 million shares, losing Rs0.88 to close at Rs9.9.

Foreign institutional investors were net sellers of Rs1.95 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.

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