Bullish momentum prevailed at the Pakistan Stock Exchange on Tuesday as market participants were optimistic about the improving economic situation, sparking hopes for the revival of International Monetary Fund (IMF) loan programme.
The market staged a spectacular rally, adding 504 points to the benchmark KSE-100 index. It extended the bull run for the sixth consecutive session and tossed the index above 45,000 points.
Bulls were seen dominating the market throughout the day, as the development regarding the Finance (Supplementary) Bill 2021 coupled with December’s export figures depicting contraction in trade deficit bolstered investor interest.
Earlier, trading kicked off with a rally as investors cherry-picked stocks at attractive valuations, mainly in the technology sector.
Later, the index, despite recording minor ups and downs, managed to rise at a steady pace. In the final hour, there was across-the-board profit-taking, which wiped off some of the gains.
At close, the benchmark KSE-100 index recorded an increase of 503.95 points, or 1.12%, to settle at 45,390.84.
A report of Arif Habib Limited stated that bullish momentum continued as the confidence of investors rose due to improvement in economic numbers. Trade deficit declined to $4.1 billion during December 2021 along with a drop in food inflation.
The market opened in the green zone with traders placing aggressive bets on high beta stocks, said the report. Tech stocks made the journey to the north as fresh allocation of funds were made in order to achieve alpha returns.
In the last trading hour, across-the-board profit-taking was witnessed mainly in cyclical stocks.
The market continued to trade sideways, witnessing hefty volumes in third-tier stocks, the report said.
Sectors contributing to the performance included technology (+112 points), cement (+72 points), exploration and production (+59 points), power (+42 points) and pharmaceutical (+36 points).
JS Global analyst Neelam Naz said that the KSE-100 index kept the new year euphoria intact and managed to close at 45,391, gaining 504 points.
Major volume contributors were TRG Pakistan (+4.3%), WorldCall Telecom (+4.8%), Telecard Limited (+6.8%), First National Equities (+3.7%) and Pakistan Refinery (+7%).
The refinery sector was in the limelight following news reports about refineries getting substantial orders for the next few months, the analyst said.
Major positive contributors to the index were TRG Pakistan, Systems Limited, Hub Power Company, Unity Foods and Lucky Cement.
“Going forward, positive news about the IMF will create more stability in the market,” she said. “We recommend investors to avail any dips to accumulate technology, oil and gas exploration, banking and cyclical sector stocks.”
Overall trading volumes rose to 375.99 million shares compared with Monday’s tally of 195.2 million. The value of shares traded during the day was Rs12.8 billion.
Shares of 376 companies were traded. At the end of the day, 266 stocks closed higher, 86 declined and 24 remained unchanged.
Unity Foods (R) was the volume leader with 25.7 million shares, gaining Rs0.49 to close at Rs1.48. It was followed by TRG Pakistan with 23 million shares, gaining Rs5.07 to close at Rs123.39 and WorldCall Telecom with 22.1 million shares, gaining Rs0.1 to close at Rs2.17.
Foreign institutional investors were net buyers of Rs957.36 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
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