Market watch: Stocks rally on positive economic indicators
The Pakistan Stock Exchange (PSX) on Monday surged nearly 1,000 points to regain the ground lost in the previous week, with vital support coming from upbeat economic numbers.
Better-than-expected current account data, released by the State Bank of Pakistan (SBP) late Friday last week, strengthened investor confidence.
According to the data, the cumulative surplus in the current account balance improved close to $1 billion in the first nine months (Jul-Mar) of current fiscal year.
Moreover, investments through the Roshan Digital Accounts (RDA) surpassed the major milestone of $1 billion on Saturday.
A three-session losing streak came to an end as the benchmark KSE-100 index advanced on the back of strong corporate earnings and once again crossed the 45,000-point mark.
Although the KSE-100 index opened on a negative note due to concerns over coronavirus cases and measures taken by the government to contain the spread of Covid-19, the tide changed in the wake of impressive results and encouraging economic numbers. Investors rushed to accumulate stocks, which pushed the index towards north.
At close, the benchmark KSE-100 index recorded an increase of 976.01 points, or 2.18%, to settle at 45,682.77 points.
Speaking to The Express Tribune, Pak-Kuwait Investment Company Head of Research Samiullah Tariq said that better-than-expected figures of balance of payments triggered a rally.
“Moreover, optimistic projections about wheat production and some reduction in the number of coronavirus cases further fuelled the uptrend,” the analyst said.
He stated that market players expected a better gross domestic product (GDP) growth rate in the wake of improved economic numbers.
Arif Habib Limited, in its report, stated that the market rebounded in anticipation of a fresh injection by mutual funds, despite the persistent selling pressure witnessed over the past couple of sessions in the wake of rising cases of coronavirus.
Financial results announced earlier during the session failed to cause excitement in the market, when the index dipped 317 points.
Aggressive buying was observed in Oil and Gas Development Company (OGDC), Pakistan Petroleum and Pakistan State Oil (PSO), all of which touched their upper circuits during the day. However, OGDC and PSO closed below the upper limit.
Similarly, buying was noted in HBL and UBL, which helped the index post a gain of 1,246 points after sustaining a loss of 317 points. The market closed at +976 points.
Sectors contributing to the performance included exploration and production (+239 points), banks (+177 points), cement (+99 points), fertiliser (+87 points) and pharmaceutical (+81 points).
Individually, stocks that contributed positively to the index included OGDC (+102 points), Pakistan Petroleum (+96 points), Hubco (+78 points), TRG Pakistan (+60 points) and Lucky Cement (+58 points).
Stocks that contributed negatively were Pak Suzuki Motor Company (-9 points), International Industries (-8 points), Adamjee Insurance Company (-6 points), Lotte Chemical (-5 points) and K-Electric (-5 points).
Overall trading volumes soared to 409.1 million shares compared with Friday’s tally of 240.5 million. The value of shares traded during the day was Rs23.97 billion.
Shares of 397 companies were traded. At the end of the day, 211 stocks closed higher, 170 declined and 16 remained unchanged.
Telecard Limited was the volume leader with 55 million shares, losing Rs1.03 to close at Rs14.99. It was followed by TRG Pakistan with 53.6 million shares, gaining Rs5.52 to close at Rs181.69 and Unity Foods with 26.4 million shares, gaining Rs0.64 to close at Rs31.51.
Foreign institutional investors were net sellers of Rs530.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.