Benchmark index increases 1,312.68 points to close at 39,296.30. PHOTO: AFP
Moreover, recent decrease in global oil prices along with a rapid recovery in world equity markets played the role of catalysts in positive close of the market.
According to data released by Pakistan Bureau of Statistics (PBS), the inflation rate eased to 12.4%, which drove investor sentiment during the day.
Furthermore, on the international front, Asian shares regained a measure of calm on Monday as markets bounced after a searing sell-off last week and investors pinned hopes on a likely coordinated global monetary response to help soften the economic blow of the coronavirus outbreak.
At close, the benchmark KSE-100 index recorded an increase of 1,312.68 points, or 3.46%, to settle at 39,296.30.
BMA Research Executive Director Saad Hashmi told The Express Tribune that the inflation reading falling below market expectations was the major reason behind the rise in the KSE-100 index.
"Inflation fell below market consensus, hence, it provided investors with the much-needed relief," he said. "It has also sparked speculation about interest rate cut by the State Bank of Pakistan in the new monetary policy."
Arif Habib Limited Head of Research Samiullah Tariq told The Express Tribune that the market had declined significantly due to fears of coronavirus, which was an overreaction. "Market is now up due to the positive impact of lower oil prices, subdued inflation and better-than-expected trade data," he added.
Arif Habib Limited, in its report, stated that the leading indicator that helped the index surge was the Consumer Price Index (CPI) data, which showed a 220-basis-point decline over last month from 14.6% to 12.4%, beating all analysts' estimates.
"Following the release of CPI data, bond yields in the secondary market fell that renewed hopes for a rate cut in the ongoing month, as per schedule. In addition to this, an increase of 3% in international crude prices on Monday helped the listed oil and gas chain to post gains," it said.
The cement sector led the volumes with trading in 48.5 million shares, followed by banks (27 million) and oil and gas marketing companies (21.1 million).
Stocks that contributed positively included Engro (+137 points), OGDC (+104 points), Pakistan Petroleum Limited (+86 points), Hubco (+73 points) and Lucky Cement (+71 points).
Meanwhile, stocks that contributed negatively were NBP (-30 points), The Bank of Punjab (-11 points), Habib Metropolitan Bank (-3 points), Shifa International Hospitals (-2 points) and Pakistan Services Limited (-1 point).
JS Global analyst Maaz Mulla said Pakistan Stock Exchange gave a warm welcome to investors at the start of new month as the index hit an intra-day high of 1,379 points.
"This positivity came after the announcement of CPI for February, which came in at 12.4%." On a month-on-month basis, the urban CPI recorded a decrease of 1.09% while rural CPI fell 0.97%.
Major movers of the day, which pushed the index upwards, were Engro (+6.4%), OGDC (+5.8%), Pakistan Petroleum Limited (+5.3%), Bank AL Habib (+5.6%), Lucky Cement (+5.3%) and Hubco (+3.8%).
The cement sector continued its upward march where DG Khan Cement (+7%), Maple Leaf Cement (+7%), Cherat Cement (+7%), Pioneer Cement (+7%) and Fauji Cement (+6.9%) closed at their respective upper circuit.
In the exploration and production sector, Pakistan Oilfields (+3%), Pakistan Petroleum (+5.3%) and Oil and Gas Development Company (+5.8%) closed sharply up as crude oil prices went up in the international market.
"Moving ahead, we expect the market to remain positive in the medium term. However, profit-taking cannot be ruled out in the short term," Mulla added.
Overall, trading volumes increased to 215.3 million shares compared with Friday's tally of 202.2 million. The value of shares traded during the day was Rs9.1 billion.
Shares of 371 companies were traded. At the end of the day, 306 stocks closed higher, 48 declined and 17 remained unchanged.
Maple Leaf was the volume leader with 18.1 million shares, gaining Rs1.70 to close at Rs26.09. It was followed by Hascol Petroleum with 15.7 million shares, increasing Rs0.55 to close at Rs19.38 and The Bank of Punjab with 13.5 million shares, losing Rs0.47 to close at Rs11.92.
Foreign institutional investors were net sellers of Rs377.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
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