Bulls maintained their grip on the Pakistan Stock Exchange on Tuesday as the KSE-100 index extended the rally and breached the 48,000-point barrier for the first time since June 2017.
A slight contraction in the Consumer Price Index to 10.9% in May 2021 bolstered investor spirits and encouraged them to make fresh investment. In addition, a drop in Covid-19 cases and the overall positivity rate in the past 24 hours signalled some success in the fight against the coronavirus and raised hopes for a further economic recovery.
Taking cue from the decline in infection rate, the investors opted to assume fresh positions. Further uptrend came on the back of a spike in international oil prices to the highest since March 2021, which sparked a buying spree in the oil and gas exploration sector, which closed entirely in the green.
At close, the benchmark KSE-100 index recorded an increase of 294.92 points, or 0.62%, to settle at 48,191.26.
The stock market jumped as soon as trading began, however, most of the gains were wiped off by midday as a double-digit inflation reading worried some investors. The market staged a modest recovery later in the day and closed up by nearly 300 points.
Alpha Beta Core CEO Khurram Schehzad told The Express Tribune that hopes for a business-friendly budget announcement drove market sentiment and lent support to the rally.
“Investors expect a development project-focused budget and the government has signalled the imposition of a small number of taxes compared to the previous budget,” he said.
Both of these expectations raised investor spirits and fuelled the rally. “The government is focusing on an easy fiscal policy now,” he said.
Arif Habib Limited, in its report, stated that the market remained upbeat in anticipation of budgetary measures, which was further supported by the uptick in international crude oil prices, courtesy Brent crude that crossed $70 per barrel.
The KSE-100 index added a total of 341 points during the session and closed up by 295 points.
Oil and gas marketing companies and power sector took turns on the back of release of payments due from the government on account of circular debt. However, no news could be confirmed.
The exploration and production sector contributed to the rise in the index on the back of higher crude oil prices, whereas the fertiliser sector added points to the table on expectation of budget incentives, the report said.
JS Global analyst Maaz Mulla said that continuing its bullish momentum, the KSE-100 index closed the session at 48,191.
The cement sector saw profit-booking where Pioneer Cement (-0.7%), Attock Cement (-1.1%), Cherat Cement (-0.4%) and Maple Leaf Cement (-1%) closed below their previous day’s close.
Meanwhile, Hubco (+1.2%), Kapco (+1.1%) and Nishat Chunian (+7.5%) closed higher on expected disbursement of pending payments to the power sector.
With the surge in international oil prices, Oil and Gas Development Company (+1.4%), Pakistan Petroleum (+2.7%) and Pakistan Oilfields (+1.8%) remained in the green.
As the third wave of coronavirus gradually abates across the country, Pakistan on Tuesday reported almost three-week low cases.
“Moving forward, the market is expected to continue its bullish trend and investors are advised to view any dip as a buying opportunity in construction and export-oriented sectors,” the analyst said.
Overall trading volumes declined to 1.39 billion shares compared with Monday’s tally of 1.41 billion. The value of shares traded during the day was Rs30.5 billion.
Shares of 421 companies were traded. At the end of the day, 258 stocks closed higher, 152 declined and 11 remained unchanged.
WorldCall Telecom was the volume leader with 354.1 million shares, losing Rs0.08 to close at Rs3.59. It was followed by Byco Petroleum with 94.6 million shares, gaining Rs0.25 to close at Rs11.5 and Silkbank with 86.1 million shares, gaining Rs0.06 to close at Rs1.7.
Foreign institutional investors were net sellers of Rs268.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.