Benchmark index increases 952.8 points to settle at 34,111.64. PHOTO: AFP
With business activities being suspended for over a month now to curtail the spread of Covid-19, the government is set to announce easing of a nationwide lockdown late on Thursday. The news acted as a much-needed positive trigger for the market and assisted the KSE-100 index in recording sufficient gains.
Market participants have also raised expectations of yet another interest rate cut by the State Bank of Pakistan in its monetary policy announcement in May due to low forecasted inflation for the month of April. Investors also took cue from the recovery in global stock markets, which lent further support to the bourse and aided the rise.
Trading began with a sharp spike and the momentum persisted throughout the day. Despite a few dips, the strong buying interested propelled the index to power past the 34,000-mark.
At close, the benchmark KSE-100 index recorded an increase of 952.8 points, or 2.87%, to settle at 34,111.64.
Arif Habib Limited Head of Research Samiullah Tariq said stock market rose due to expectation of easing of lockdown coupled with hopes of a new vaccine for the cure and prevention of coronavirus.
In addition to this, expectation of a lower inflation reading for April triggered optimism which further raised hopes of a cut in the interest rate in monetary policy announcement in May.
“The KSE-100 index posted highest monthly return in 11 years during April 2020 and highest ever monthly return for the month of April,” the analyst said.
Meanwhile, MAFA Capital CEO Adnan Agar said the recovery was well in line with market expectation.
He said the stock market rallied on the back of a rebound in global stock markets due to expectation of economic betterment throughout the world as countries have started easing or lifting lockdowns.
Anticipation of economy turning normal and businesses restarting operations lent further support.
“The assistance extended by G20 countries and the International Monetary Fund to Pakistan also acted as positive trigger on Thursday and fuelled the rise,” Agar added.
Overall, trading volumes increased to 292.1 million shares compared with Wednesday’s tally of 140.5 million. The value of shares traded during the day was Rs12.4 billion.
Shares of 367 companies were traded. At the end of the day, 284 stocks closed higher, 73 declined and 10 remained unchanged.
Hascol Petroleum was the volume leader with 37.8 million shares, gaining Rs0.55 to close at Rs15.18. It was followed by Pak Elektron with 27 million shares, gaining Rs1.5 to close at Rs24.09 and Maple Leaf Cement with 25.8 million shares, gaining Rs1.08 to close at Rs28.18.
Foreign institutional investors were net sellers of Rs1.07 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
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