Market watch: Investors cheer stimulus package, KSE-100 soars 1,208 points
Benchmark index rises 4.31% to close at 29,231.63
Benchmark index rises 4.31% to close at 29,231.63. PHOTO: AFP
KARACHI:
Pakistan Stock Exchange (PSX) reversed its slump on Tuesday and the benchmark KSE-100 index soared over 1,200 points as investors cheered the economic relief package approved by the government a day ago.
The Economic Coordination Committee (ECC) on Monday approved a Rs1.2-trillion economic relief package to shield the economy from adverse effects of the coronavirus pandemic, which bolstered investor sentiment and encouraged them to make fresh investment.
Lending further support to Pakistan’s bourse was a recovery in global and regional stock markets, which staged modest rallies to end the quarter on a bullish note.
In Asia, the MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.94% but it was still down 22% for the quarter, its worst performance since 2008. Shanghai blue chips rose 0.4% and South Korea gained 1.87%. Japan’s Nikkei eased 1%.
European stocks rallied at the open as well with Euro Stoxx gaining 1.7%, France’s CAC 40 1.15% and the German Dax 2.08%. Britain’s FTSE 100 rose 1.8%.
Earlier, trading began on a bullish note at the PSX and the KSE-100 climbed steadily till midday. In the final hours, the advance accelerated with the market ending the day with inflated gains.
At close, the benchmark KSE-100 index recorded a surge of 1,208.24 points, or 4.31%, to settle at 29,231.63.
Speaking to The Express Tribune, Mafa Capital CEO Adnan Agar said the main reason behind the stock market rally was the economic relief package approved by the government on Monday.
“In addition to this, major stock markets around the world recovered, which provided direction to the KSE-100 index,” he said. “Globally, many countries have announced stimulus packages for their respective economies, which have helped capital markets recover.”
He pointed out that China, the US and many others had unveiled support packages to lift investor sentiment and similar was the case with Pakistan.
He was of the view that impact of the virus on the KSE-100 index had peaked as it had dropped below the 28,000-point mark last week. “Full economic impact of the coronavirus cannot be calculated at this point in time because it is uncertain whether government’s efforts to contain the pandemic will bear fruit or not,” Agar said.
Arif Habib Limited Head of Research Samiullah Tariq said Pakistan’s stock market rose following a milder-than-expected spread of the coronavirus in the country.
“Expectation of a partial easing of the lockdown from next week fueled investor optimism,” he said. “The end of the quarter and lower stock valuations are also the prime reasons for the market’s surge.”
Arif Habib Limited, in its report, stated that the KSE-100 index soared 4.31% (+1,208 points), which in percentage terms was the highest single-day increase since March 31, 2015.
“During March, the KSE-100 index contracted 23% (-8,752 points) – the biggest negative return since December 2008,” it said. “The quarter remained the worst after 4QCY18 (-36.1%).”
Overall, trading volumes increased to 221.9 million shares compared with Monday’s tally of 159.5 million. The value of shares traded during the day was Rs7.4 billion.
Shares of 353 companies were traded. At the end of the day, 288 stocks closed higher, 56 declined and nine remained unchanged.
Hascol Petroleum was the volume leader with 25.8 million shares, gaining Re1 to close at Rs11.65. It was followed by Maple Leaf Cement with 19 million shares, gaining Rs1.39 to close at Rs20.72 and K-Electric with 16.8 million shares, gaining Rs0.18 to close at Rs2.83.
Foreign institutional investors were net sellers of Rs1.45 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
Pakistan Stock Exchange (PSX) reversed its slump on Tuesday and the benchmark KSE-100 index soared over 1,200 points as investors cheered the economic relief package approved by the government a day ago.
The Economic Coordination Committee (ECC) on Monday approved a Rs1.2-trillion economic relief package to shield the economy from adverse effects of the coronavirus pandemic, which bolstered investor sentiment and encouraged them to make fresh investment.
Lending further support to Pakistan’s bourse was a recovery in global and regional stock markets, which staged modest rallies to end the quarter on a bullish note.
In Asia, the MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.94% but it was still down 22% for the quarter, its worst performance since 2008. Shanghai blue chips rose 0.4% and South Korea gained 1.87%. Japan’s Nikkei eased 1%.
European stocks rallied at the open as well with Euro Stoxx gaining 1.7%, France’s CAC 40 1.15% and the German Dax 2.08%. Britain’s FTSE 100 rose 1.8%.
Earlier, trading began on a bullish note at the PSX and the KSE-100 climbed steadily till midday. In the final hours, the advance accelerated with the market ending the day with inflated gains.
At close, the benchmark KSE-100 index recorded a surge of 1,208.24 points, or 4.31%, to settle at 29,231.63.
Speaking to The Express Tribune, Mafa Capital CEO Adnan Agar said the main reason behind the stock market rally was the economic relief package approved by the government on Monday.
“In addition to this, major stock markets around the world recovered, which provided direction to the KSE-100 index,” he said. “Globally, many countries have announced stimulus packages for their respective economies, which have helped capital markets recover.”
He pointed out that China, the US and many others had unveiled support packages to lift investor sentiment and similar was the case with Pakistan.
He was of the view that impact of the virus on the KSE-100 index had peaked as it had dropped below the 28,000-point mark last week. “Full economic impact of the coronavirus cannot be calculated at this point in time because it is uncertain whether government’s efforts to contain the pandemic will bear fruit or not,” Agar said.
Arif Habib Limited Head of Research Samiullah Tariq said Pakistan’s stock market rose following a milder-than-expected spread of the coronavirus in the country.
“Expectation of a partial easing of the lockdown from next week fueled investor optimism,” he said. “The end of the quarter and lower stock valuations are also the prime reasons for the market’s surge.”
Arif Habib Limited, in its report, stated that the KSE-100 index soared 4.31% (+1,208 points), which in percentage terms was the highest single-day increase since March 31, 2015.
“During March, the KSE-100 index contracted 23% (-8,752 points) – the biggest negative return since December 2008,” it said. “The quarter remained the worst after 4QCY18 (-36.1%).”
Overall, trading volumes increased to 221.9 million shares compared with Monday’s tally of 159.5 million. The value of shares traded during the day was Rs7.4 billion.
Shares of 353 companies were traded. At the end of the day, 288 stocks closed higher, 56 declined and nine remained unchanged.
Hascol Petroleum was the volume leader with 25.8 million shares, gaining Re1 to close at Rs11.65. It was followed by Maple Leaf Cement with 19 million shares, gaining Rs1.39 to close at Rs20.72 and K-Electric with 16.8 million shares, gaining Rs0.18 to close at Rs2.83.
Foreign institutional investors were net sellers of Rs1.45 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.