Market watch: Stocks rally as investor optimism grows
Shares of 366 companies were traded. At the end of the day, 221 stocks closed higher. PHOTO: REUTERS
Bulls continued to dominate trading at the Pakistan Stock Exchange on Tuesday, as the benchmark KSE-100 index recorded significant gains for the second consecutive session, rising 300 points.
The index managed to stay in the green zone throughout the day.
A host of positive triggers including the rise in revenue collection by the Federal Board of Revenue (FBR) coupled with optimism about the outcome of forthcoming International Monetary Fund (IMF) board meeting created buying interest among market players.
The IMF board is set to meet on February 2 (today) to discuss Pakistan’s case for the resumption of loan programme.
Moreover, fresh recovery of the rupee against the US dollar ahead of Prime Minister Imran Khan’s visit to China for seeking a $3 billion loan strengthened the confidence of investors.
In the morning, the market recorded a brief rally, which was followed by some decline in the index owing to profit-taking. In the first hour, the index touched an intra-day low of 45,375 points.
From that point onwards, the KSE-100 index began its upward journey at a decent pace and with minor fluctuations.
In the last trading hour, profit-taking was noted because of increase in January’s inflation reading coupled with concerns over rising Covid-19 cases in the country, which erased some of the gains.
At close, the benchmark KSE-100 index recorded an increase of 299.82 points, or 0.66%, to settle at 45,674.50.
A report of Arif Habib Limited stated that bullish momentum was witnessed at the bourse due to increased optimism about the ongoing corporate results season and IMF board announcement.
“The market opened on a positive note and stayed in the green zone throughout the day,” it said.
Main board activity remained gloomy. On the flip side, activity continued to remain sideways as the market witnessed hefty volumes in third-tier stocks.
In the last trading hour, profit-taking was witnessed in the wake of rising Covid-19 cases and alarming Consumer Price Index (CPI) at 12.96% for January 2022.
Sectors contributing to the performance included exploration and production (+63 points), banks (+61 points), fertiliser (+58 points), miscellaneous (+57 points) and cement (+60 points), the report said.
JS Global analyst Waqar Iqbal said that the market continued its bullish momentum for the second consecutive session over clarity regarding the IMF programme, prime minister’s visit to China to seek more loans and better FBR revenue numbers for the first seven months of current fiscal year.
The headline inflation came in at 13% for January, lower than the street consensus of 13.5%, the analyst said.
Top volume leaders were Ghani Global Holdings (+2.5%), WorldCall Telecom (+1.3%) and Treet Corporation (+0.65%).
“Going forward, any positive development on the external account front is likely to further lift the index,” the analyst said.
Overall trading volumes increased to 312.5 million shares compared with Monday’s tally of 251.7 million. The value of shares traded during the day was Rs9.5 billion.
Shares of 366 companies were traded. At the end of the day, 221 stocks closed higher, 115 declined and 30 remained unchanged.
Ghani Global Holdings was the volume leader with 25.5 million shares, gaining Rs0.55 to close at Rs22.72. It was followed by WorldCall Telecom with 24.9 million shares, gaining Rs0.03 to close at Rs2.27 and Treet Corporation with 19.5 million shares, gaining Rs0.25 to close at Rs40.94.
Foreign institutional investors were net sellers of Rs73 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.