KARACHI: In line with expectations, the Pakistan stock market staged a handsome rally of over 700 points on Monday, powering past the 39,200 mark.
The bullish momentum came after the government assured stockbrokers that it would do away with the regulations brought by the previous government in 2017 that shot down the high-flying Pakistan Stock Exchange (PSX). The initiative is aimed at breathing a new life into the crippling bourse.
Additionally, attractive stock valuations also encouraged investors to resume buying activity.
At the end of trading, the benchmark KSE 100-share Index recorded an increase of 737.58 points or 1.91% to settle at 39,299.63.
"Investors feel that the government's promise in yesterday's (Sunday) meeting regarding capital gains tax (CGT) and turnover tax may help restore positive sentiments," Topline Securities CEO Mohammad Sohail told The Express Tribune.
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Seasoned brokers Arif Habib and Aqeel Karim Dhedhi had anticipated the rally following the meeting with Prime Minister Imran Khan and Finance Minister Asad Umar at the Governor House Sindh on Sunday.
Umar told meeting participants that the government had prepared all the regulations required to do away with the wrongdoing with the PSX. The new regulations are aimed at rationalising taxes on stock trading which would come into effect by the end of current month.
Elixir Securities' analyst Murtaza Jafar said value-hunting was observed across the board as investors cheered the latest promises made by the prime minister and finance minister during their trip to the PSX.
"While larger concerns over the economy remained in place, the assurance of relaxation provided much-needed breather to the market," said Jafar.
Energy stocks contributed most of the gains to the trading session after the Organisation of Petroleum Exporting Countries (OPEC) decided to reduce crude oil production by 800,000 barrels per day while another cut of 400,000 barrels per day was announced by non-OPEC members, taking total production curbs to 1.2 million barrels.
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"This allowed international crude oil to rally around 2.5% on Friday post-equity market close in Pakistan," he said.
Oil and Gas Development Company (OGDC, +4.4%), Pakistan Petroleum Limited (+5%) and Pakistan Oilfields Limited (+4.2%) collectively contributed 234 points to gains in the KSE-100 index. "Going forward, we expect financial stocks to take centre stage," he added.
Overall, trading volumes increased to 154.2 million shares compared with Friday's tally of 128.5 million. The value of shares traded during the day was Rs6.6 billion.
Shares of 356 companies were traded. At the end of the day, 242 stocks closed higher, 93 declined and 21 remained unchanged.
K-Electric was the volume leader with 34.7 million shares, gaining Rs0.45 to close at Rs5.98. It was followed by Engro Polymer with 7.95 million shares, gaining Rs1.01 to close at Rs37.80 and The Bank of Punjab with 5.99 million shares, gaining Rs0.28 to close at Rs13.20.
Foreign institutional investors were net sellers of Rs326.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.