Market watch: PSX soars 2.2% as political turmoil eases

KARACHI:

Bulls dominated trading at the Pakistan Stock Exchange (PSX) on Monday as the benchmark KSE-100 index rallied, gaining nearly 1,000 points on the back of strong investor sentiment.

Clarity on the political front after the Senate chairman election – which saw Sadiq Sanjrani come back as the upper house chairman – and diminishing concerns over withdrawal of tax exemptions encouraged market players to buy stocks.

Investors also took cue from global financial markets, which helped the index power past the 44,000-point mark.

The KSE-100 index shot up from the moment trading began and, despite a brief drop in midday trading, it maintained its upward march. Investor excitement was underpinned by expectations of quick economic recovery worldwide.

The index cumulatively added 1,987 points, or 4.64%, in the last two trading sessions. It was the highest two-day increase since April 20, 2020 when the index added 2,170 points.

At close, the benchmark KSE-100 index recorded an increase of 978.51 points, or 2.23%, to settle at 44,766.59 points.

“In line with expectations following the Senate chairman election, the market performed well as players preferred re-election of the government candidate,” said Tangent Capital Advisers CEO Muzammil Aslam while talking to The Express Tribune.

Pointing to the losses suffered last week, Aslam said the market was under pressure due to political uncertainty and macroeconomic concerns. “Going forward, the market is expected to get back to focus on the fundamentals,” he said.

He, however, highlighted that the planned long march by the opposition alliance could affect investor sentiment. “Market performance also depends on the long march, if it gets aggressive, the market will once again suffer due to selling pressure.”

Pak-Kuwait Investment Company Head of Research Samiullah Tariq told The Express Tribune that the market performed well on the back of clarity on the political front.

“Moreover, the clarity about tax exemptions, which were ruled out after the circulation of an amendment bill, supported the uptrend,” said Tariq.

Shedding light on the market outlook for the ongoing week, the research head said the bourse was expected to stay in the green, but concerns about inflation could impact the investment climate.

Arif Habib Limited, in its report, stated that the market opened on a positive note and added a total of 1,051 points, similar to the performance witnessed on Friday.

The report added that the winning of Senate chairmanship by the government candidate encouraged investors to take the index upwards. Buying was witnessed across the board, with cement and steel sectors contributing the most to the index.

Sectors contributing to the performance included cement (+170 points), technology (+152 points), oil and gas marketing companies (+100 points), banks (+92 points) and power (+79 points).

Individually, stocks that contributed positively to the index included TRG Pakistan (+97 points), Pakistan State Oil (+71 points), Lucky Cement (+58 points), Systems Limited (+54 points) and Hubco (+47 points).

Stocks that contributed negatively were Engro Corporation (-12 points), MCB (-5 points), Packages Limited (-4 points), Murree Brewery (-4 points) and HBL Growth Fund (-4 points).

Overall trading volumes surged to 455.5 million shares compared with Friday’s tally of 442.6 million. The value of shares traded during the day was Rs21.96 billion.

Shares of 403 companies were traded. At the end of the day, 332 stocks closed higher, 59 declined and 12 remained unchanged.

TRG Pakistan was the volume leader with 24.9 million shares, gaining Rs8.99 to close at Rs128.98. It was followed by Unity Foods with 23.6 million shares, gaining Rs1.99 to close at Rs28.55 and Fauji Cement with 21.1 million shares, gaining Rs0.44 to close at Rs23.1.

Foreign institutional investors were net buyers of Rs493.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.