Market watch: Stocks turn bullish over policy rate clarity
Shares of 341 companies were traded. At the end of the day, 148 stocks closed higher. PHOTO: FILE
Investor interest revived at the Pakistan Stock Exchange on Wednesday as the benchmark KSE-100 index regained some lost ground owing to the status quo maintained by the State Bank of Pakistan (SBP) in the monetary policy.
Keeping in view the deteriorating geopolitical situation and the threat of escalation of war, a small chunk of market players had expected the central bank to increase the policy rate. The anticipation had driven panic selling at the bourse for the past few days.
However, the emergence of clarity in the monetary policy announcement helped the KSE-100 index recoup losses, which aided the uptrend.
On the flip side, the decline in the value of the rupee against the US dollar to an all-time low capped gains in the stock market.
Concerns over a sharp jump in global commodity prices played on the minds of market participants, which took a toll on the trading environment. With Pakistan’s imports staying at higher levels, traders expected a further rise in inflation over the next few months.
Earlier, the KSE-100 index spiked as soon as trading began, however, worries over the weakening economic situation wiped out the gains by midday. At that point, the market witnessed renewed buying, which helped the index close above the 43,000-point mark.
At close, the benchmark KSE-100 index recorded an increase of 164.61 points, or 0.38%, to settle at 43,042.96 points.
A report of Arif Habib Limited stated that the market stayed in the green zone as the SBP kept the policy rate unchanged at 9.75% in March 2022 monetary policy meeting.
The State Bank held its benchmark interest rate steady for the second meeting in a row as inflationary concerns cooled a bit, but it did hint at the possibility of an early huddle in case any economic fallout of the Russia-Ukraine war spilled over into the country.
“Cement sector stayed in the red zone due to mounting international coal prices. In the last trading hour, value buying was observed,” the report said.
JS Global analyst Mubashir Anis Naviwala said that a positive momentum was witnessed in the stock market but political uncertainty kept the participation low. The index closed at 43,043, gaining 165 points day-on-day.
Major contribution to the traded volume of 184 million shares came from Ghani Global Holdings (-2.1%), Pakistan International Bulk Terminal (-3.9%), TPL Properties (-7.5%), Telecard Limited (-3.6%) and TPL Corporation (-9.5%).
“Going forward, we expect range-bound activity to continue on concerns over the economy and the geopolitical situation,” he said. “We recommend investors to avail any downside as an opportunity to buy in the banking and exploration and production sectors.”
Overall trading volumes dipped to 183.7 million shares compared with Tuesday’s tally of 226.1 million. The value of shares traded during the day was Rs6.1 billion.
Shares of 341 companies were traded. At the end of the day, 148 stocks closed higher, 167 declined and 26 remained unchanged.
Ghani Global Holdings was the volume leader with 12.8 million shares, losing Rs0.34 to close at Rs15.49. It was followed by Pakistan International Bulk Terminal with 12.5 million shares, losing Rs0.25 to close at Rs6.17 and TPL Properties with 11.1 million shares, losing Rs1.9 to close at Rs23.48.
Foreign institutional investors were net sellers of Rs149.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.