KARACHI: The eight-day losing streak finally came to an end as stocks recovered from a five-year low on Monday and gained nearly 800 points.
After losing around 10% in the past eight sessions, the Pakistan stock market bounced back on renewed buying interest at historically low share prices.
“The market is up on value buying,” Arif Habib Limited Head of Research Samiullah Tariq told The Express Tribune.
“The market has bottomed out,” he said, adding that the latest downtrend was beyond technical levels. It, however, remained uncertain whether the recovery was sustainable or not in next sessions.
“The buying spree should continue. Shares are available at highly discounted prices,” he said.
The buying spree was witnessed in stocks across the board and the rally was led by oil and gas exploration, bank and cement sectors.
Earlier, the escalation in geopolitical tensions between Pakistan and India over the Kashmir issue had invited extensive selling at the Pakistan Stock Exchange (PSX). The past eight sessions pulled the benchmark index down by 9.9%, or 3,175 points, to below 29,000 till Friday last week.
At close, the benchmark KSE 100-share Index recorded an increase of 797.79 points, or 2.77%, to settle at 29,562.42 points.
JS Global analyst Maaz Mulla said equities regained some strength with the benchmark KSE-100 index going up by 798 points. “Market participation was seen in the energy, financial, cement and fertiliser sectors,” he said.
Oil and Gas Development Company (+4.9%) closed near its upper circuit whereas Pakistan Petroleum (+4.1%) and Pakistan Oilfields (+1.4%) also remained in the green zone as crude oil prices in the international market rose in the wake of latest developments on the US-China trade front.
Moreover, among financial stocks, Bank Alfalah (+4.8%) reached near its upper limit as the bank reported 1HCY19 consolidated earnings per share (EPS) of Rs3.63 with dividend per share of Rs2. Big banks MCB Bank (+5%) and HBL (+5%) hit their upper circuits.
In the cement sector, Fauji Cement (+6.5%), Maple Leaf Cement (+5.2%) and DG Khan Cement (+4.5%) closed limit up. Lucky Cement (+2.9%) was also the major gainer in the sector.
“Moving ahead, we expect the market to exhibit volatility in coming sessions due to overall tensions on the Pakistan-India border,” Mulla added.
Overall, trading volumes increased to 102.5 million shares compared with Friday’s tally of 65.2 million. The value of shares traded during the day was Rs3.9 billion.
Shares of 354 companies were traded. At the end of the day, 283 stocks closed higher, 51 declined and 20 remained unchanged.
TRG Pakistan was the volume leader with 7.5 million shares, gaining Re1 to close at Rs13.22. It was followed by Summit Bank with 6.04 million shares, losing Rs0.09 to close at Rs0.40 and Maple Leaf Cement with 5.93 million shares, gaining Rs0.92 to close at Rs18.51.
Foreign institutional investors were net sellers of Rs209.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.