KARACHI: Bulls ruled the stock market in a rally on Wednesday, which pushed the KSE-100 index up by over 600 points as Pakistan's talks with the International Monetary Fund (IMF) seemed to be progressing well.
New IMF mission chief for Pakistan Ernesto Ramirez Rigo met with Finance Minister Asad Umar a day ago, which sparked optimism that the two sides would soon reach an agreement on a bailout package.
The spike in the market came just before the announcement of monetary policy on March 29.
Although research houses anticipate a hike of 50-75 basis points in the policy rate, the market apparently did not pay much heed to such warnings and buying activity was witnessed across the board.
Market watch: KSE-100 recovers 200 points as investors cheer China's assistance
The benchmark index got support mainly from financial and oil stocks. Earlier, trading started positively and the market kept on rising throughout the day to end just below the 39,000-point mark.
A few timely dips were, however, noted but these were tackled immediately. All index-heavy stocks performed well and cement and exploration and production sectors remained entirely in the green.
At the end of trading, the benchmark KSE 100-share Index recorded an increase of 635.88 points, or 1.66%, to settle at 38,965.01.
Topline Securities, in its report, stated equities extended gains for the second consecutive day and rose 1.7%, the second highest daily gain for the index in 2019.
"Positive sentiments were witnessed across the board as 74% of the traded stocks (on the index) closed in the black," it said. "The resurgence of investor confidence was underpinned by recent moves of the government for a likely increase in power/gas tariffs after the arrival of IMF mission chief, which signals clarity on an IMF bailout package."
For the second day, the exploration and production sector remained the biggest contributor to the KSE-100 index with 118 points on expected discovery of hydrocarbon reserves in an offshore well after a statement from Prime Minister Imran Khan.
Other major contributors to the index were cement and fertiliser companies with a cumulative addition of 196 points.
Investor participation improved significantly, rising 1.65 times to 228.7 million shares. Similarly, the traded value of stocks increased 74%, the report added.
Market watch: Weak global economic outlook prompts sell-off in Pakistan's market
Overall, trading volumes increased to 228.7 million shares compared with Tuesday's tally of 86.4 million. The value of shares traded during the day was Rs6.2 billion.
Shares of 350 companies were traded. At the end of the day, 267 stocks closed higher, 62 declined and 21 remained unchanged.
Unity Foods (R) was the volume leader with 80.4 million shares, gaining Rs0.97 to close at Rs2.87. It was followed by WorldCall Telecom with 13.6 million shares, gaining Rs0.03 to close at Rs1.12 and K-Electric with 13.5 million shares, gaining Rs0.17 to close at Rs5.62.
Foreign institutional investors were net sellers of Rs547.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.