Market watch: Stocks rise amid hopes for success of IMF talks
The Pakistan Stock Exchange remained under the control of bulls on Thursday and the benchmark KSE-100 index rose 322 points as investors cheered positive news flow pertaining to talks between Pakistan and the International Monetary Fund (IMF).
Expectations about the resumption of IMF loan programme, as strongly hinted by Adviser to Prime Minister on Finance Shaukat Tarin, drove market activity and encouraged investors to take fresh positions.
However, a further drop in rupee’s value to a new all-time low during the day eroded gains.
Earlier, the market got off to a positive start but trading remained range bound during initial hours. The KSE-100 index climbed steeply after midday and breached the 46,000-point barrier but the latest round of rupee fall reignited inflationary concerns, which pulled the market down.
At close, the benchmark KSE-100 index recorded an increase of 321.94 points, or 0.71%, to settle at 45,821.40.
A report of Arif Habib Limited stated that a clear signal of conclusion of IMF review and resumption of $6 billion loan programme by Finance Adviser Shaukat Tarin swayed the index that added a total of 665 points during the session.
The index “has cumulatively added 3,000 points since hitting the near-term bottom of 43,200 points,” it said.
Stocks of bank and exploration and production sectors contributed the most, whereas selling pressure was witnessed in technology and cyclical (cement and steel) sectors.
After touching the intra-day high, investors resorted to profit-booking, which brought net gains to 321 points at the end of the session.
Anticipation of interest rate hike by the State Bank in the next monetary policy led to a rally in banking sector stocks while exploration and production sector stocks inched up on prospects of $100-per-barrel international crude oil price, the report said.
JS Global analyst Neelam Naz said that the benchmark KSE-100 index had so far been on a winning streak in the current week, where it managed to cross the 46,000 level in intra-day trading on Thursday. However, it finally closed at 45,821 points due to profit-taking towards the end of the day.
Major positive contributors to the index were Engro, UBL, HBL, Bank AL Habib and Oil and Gas Development Company.
On the news front, OGDC announced a gas discovery at Jandran exploratory well located in Kohlu district in Balochistan.
“Going forward, investors are advised to see any corrections in the market as a buying opportunity in blue-chip stocks, mainly from the banking, textile, oil and gas exploration and marketing sectors,” the analyst said.
Overall trading volumes increased to 338.3 million shares compared with Wednesday’s tally of 308.2 million. The value of shares traded during the day was Rs13.4 billion.
Shares of 359 companies were traded. At the end of the day, 158 stocks closed higher, 185 declined and 16 remained unchanged.
The Bank of Punjab was the volume leader with 25.6 million shares, gaining Rs0.16 to close at Rs8.91. It was followed by Telecard Limited (XB) with 24.3 million shares, gaining Rs0.4 to close at Rs17.13 and Hum Network with 23.9 million shares, gaining Rs0.05 to close at Rs6.55.
Foreign institutional investors were net sellers of Rs886.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.