PSX rebounds strongly on policy rate status quo
PHOTO: FILE
Pakistan Stock Exchange (PSX), after taking a breather due to profit-taking, rebounded with significant gains on Tuesday and reached a new all-time high, driven by investors’ expectations of a status quo in the monetary policy announcement and Roshan Digital Account (RDA) inflows crossing the $7 billion mark.
Although trading commenced at the intra-day low of 66,121.13 points due to the prior bearish session, the bourse swiftly moved upwards as sentiment turned positive. Investors’ interest was fuelled by the favourable data showing 5% month-on-month (MoM) rise in car sales for November.
This, coupled with rupee stability and the improving economic conditions, propelled the KSE-100 index to the intra-day high at 66,604.04 points towards the close of trading.
Notably, cement, auto, power, fertiliser and oil marketing companies’ (OMCs) sectors made a substantial contribution to the index. However, some profit-taking was observed in banking-sector stocks. Ultimately, the bourse closed the day at a fresh peak, though with trimmed gains.
“Stocks closed at a new all-time high over expectations of status quo in the State Bank’s policy rate announcement on forecasts of easing inflation and reports of RDA inflows reaching $7.035 billion,” said Arif Habib Corp MD Ahsan Mehanti. “Upbeat data on car sales that rose 5% MoM in November 2023 and rupee stability played the role of catalysts in new record close at the PSX.”
At close, the benchmark KSE-100 index recorded gains of 414.46 points, or 0.63%, and settled at 66,426.78. Topline Securities wrote that “after a slight decline on Monday, Pakistan’s equity market rebounded on Tuesday”.
“Investors were closely watching the monetary policy committee decision, with the prevailing market sentiment indicating a leaning towards maintaining the current rate. However, some anticipated a modest reduction.”
Throughout the trading hours, positive contribution came from stocks in cement, auto, power, fertiliser and OMCs’ sectors including Lucky Cement, Millat Tractors, Hub Power, Engro Fertilisers and Sui Northern Gas Pipelines, which added 222 points, it said.
Read PSX soars as PM trip gives impetus
On the other hand, profit-taking was noted in stocks such as MCB Bank, United Bank and Service Industries, which resulted in a combined loss of 116 points, Topline added.
Arif Habib Limited (AHL), in its report, said the market was “back to the winning ways following Monday’s lower close.”
Key index contributors were Lucky Cement (+2.63%), Millat Tractors (+3.02%) and Hub Power (+1.2%) while the largest decliners were MCB Bank (-2.81%), United Bank (-1.07%) and Service Industries (-3.85%), it said.
JS Global analyst Mubashir Anis Naviwala said that bullish trend continued as the KSE-100 index touched the intra-day high of 66,604.
“Going forward, we expect the bullish trend to continue and recommend investors to view any downside as an opportunity to buy in banking, cement and exploration and production (E&P) sectors,” the analyst added.
Overall trading volumes decreased to 969.6 million shares against Monday’s tally of 1.2 billion. The value of shares traded during the day was Rs26.9 billion.
Shares of 385 companies were traded. Of these, 244 stocks closed higher, 127 dropped and 14 remained unchanged.
WorldCall Telecom was the volume leader with trading in 98.9 million shares, gaining Rs0.07 to close at Rs1.78. It was followed by Pakistan Telecommunication Company with 79.2 million shares, gaining Rs0.86 to close at Rs11.01 and K-Electric with 66.7 million shares, gaining Rs0.05 to close at Rs4.54.
Foreign investors were net buyers of shares worth Rs7.6 million, according to the NCCPL.
Published in The Express Tribune, December 13th, 2023.
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