Market watch: KSE-100 soars on expectations of interest rate cut
Benchmark index gains 591.78 points to settle at 31,546.61
Benchmark index gains 591.78 points to settle at 31,546.61. PHOTO: AFP
KARACHI:
Stocks rallied on Thursday as the benchmark KSE-100 index soared nearly 900 points in intraday trading due to signs of monetary easing as reflected in the fall in treasury bills' yield a day ago.
The cut in T-bills' yield provided much-needed positive trigger to the market and strengthened investor sentiment as they anticipated a drop in the key interest rate before December.
The stock index spiked as soon as trading began and maintained its upward trajectory throughout the day. Profit-booking emerged in final hours of the trading session, which partially erased the gains.
Nevertheless, the index managed to cross and close above the 31,500-point mark owing to robust investor interest.
At close, the benchmark KSE 100-share Index recorded an increase of 591.78 points, or 1.91%, to settle at 31,546.61 points.
"Expectations of an interest rate cut (by 25-50 basis points) sparked extended stock buying in the market," Arif Habib Limited Head of Equity Sales Saad bin Ahmed said while talking to The Express Tribune.
The rate cut expectations grew in the wake of lower-than-anticipated inflation, decrease in cut-off yield on 12-month T-bills in the latest auction and Prime Minister Imran Khan's assurance last week that rate cut would be considered, he said.
Secondly, a Sindh-based pension fund reportedly made rounds of buying at the Pakistan Stock Exchange. It was in addition to the increased activity by the mutual funds industry, he said.
The intra-day buying spree seemed to be short-lived as investors were believed to book profits in the weekend session on Friday, said the analyst.
Arif Habib Limited, in its report, stated that the market performed well with across-the-board buying. Exploration and production, financial and cement sectors contributed positively to the points table, which showed a jump of 892 points during the trading session, it said.
"A major reason for the general positivity seems to be the expectation for a rate cut, which emerged from the recent auction of T-bills that saw the yield curve slide further," it said.
At close, the market, however, saw a reduction of around 300 points and the index closed up 592 points.
Stocks of the exploration and production sector recorded a reversal in prices by the end of the session. The cement sector led the volumes with trading in 31 million shares, followed by the technology sector (26.4 million) and power sector (22.9 million).
WorldCall Telecom led the volumes with trading in 18.3 million shares, followed by K-Electric (11.7 million) and Maple Leaf Cement (11.1 million), the report concluded.
Overall, trading volumes increased to 185.8 million shares compared with Wednesday's tally of 99.7 million. The value of shares traded during the day was Rs8.1 billion.
Shares of 360 companies were traded. At the end of the day, 262 stocks closed higher, 79 declined and 19 remained unchanged.
WorldCall Telecom was the volume leader with 18.3 million shares, gaining Rs0.13 to close at Rs0.98. It was followed by K-Electric with 11.8 million shares, gaining Rs0.16 to close at Rs3.42 and Maple Leaf Cement with 11.1 million shares, gaining Rs0.42 to close at Rs16.87.
Foreign institutional investors were net sellers of Rs218.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
Stocks rallied on Thursday as the benchmark KSE-100 index soared nearly 900 points in intraday trading due to signs of monetary easing as reflected in the fall in treasury bills' yield a day ago.
The cut in T-bills' yield provided much-needed positive trigger to the market and strengthened investor sentiment as they anticipated a drop in the key interest rate before December.
The stock index spiked as soon as trading began and maintained its upward trajectory throughout the day. Profit-booking emerged in final hours of the trading session, which partially erased the gains.
Nevertheless, the index managed to cross and close above the 31,500-point mark owing to robust investor interest.
At close, the benchmark KSE 100-share Index recorded an increase of 591.78 points, or 1.91%, to settle at 31,546.61 points.
"Expectations of an interest rate cut (by 25-50 basis points) sparked extended stock buying in the market," Arif Habib Limited Head of Equity Sales Saad bin Ahmed said while talking to The Express Tribune.
The rate cut expectations grew in the wake of lower-than-anticipated inflation, decrease in cut-off yield on 12-month T-bills in the latest auction and Prime Minister Imran Khan's assurance last week that rate cut would be considered, he said.
Secondly, a Sindh-based pension fund reportedly made rounds of buying at the Pakistan Stock Exchange. It was in addition to the increased activity by the mutual funds industry, he said.
The intra-day buying spree seemed to be short-lived as investors were believed to book profits in the weekend session on Friday, said the analyst.
Arif Habib Limited, in its report, stated that the market performed well with across-the-board buying. Exploration and production, financial and cement sectors contributed positively to the points table, which showed a jump of 892 points during the trading session, it said.
"A major reason for the general positivity seems to be the expectation for a rate cut, which emerged from the recent auction of T-bills that saw the yield curve slide further," it said.
At close, the market, however, saw a reduction of around 300 points and the index closed up 592 points.
Stocks of the exploration and production sector recorded a reversal in prices by the end of the session. The cement sector led the volumes with trading in 31 million shares, followed by the technology sector (26.4 million) and power sector (22.9 million).
WorldCall Telecom led the volumes with trading in 18.3 million shares, followed by K-Electric (11.7 million) and Maple Leaf Cement (11.1 million), the report concluded.
Overall, trading volumes increased to 185.8 million shares compared with Wednesday's tally of 99.7 million. The value of shares traded during the day was Rs8.1 billion.
Shares of 360 companies were traded. At the end of the day, 262 stocks closed higher, 79 declined and 19 remained unchanged.
WorldCall Telecom was the volume leader with 18.3 million shares, gaining Rs0.13 to close at Rs0.98. It was followed by K-Electric with 11.8 million shares, gaining Rs0.16 to close at Rs3.42 and Maple Leaf Cement with 11.1 million shares, gaining Rs0.42 to close at Rs16.87.
Foreign institutional investors were net sellers of Rs218.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.