PSX makes sharp recovery on IMF loan hopes

KSE-100 index rises 245.56 points, settles at 62,693.57

KARACHI:

Pakistan’s stock market, in yet another volatile session on Thursday, made a modest recovery after hefty losses over the past two days as investors resorted to selective buying over hopes of inflow of foreign funding and a stable rupee.

In the morning, trading kicked off on a positive note but soon the KSE-100 index started falling and took a deep dive to the intra-day low at 61,750.97 points well before midday. It came in the wake of heavy selling pressure from market players.

However, the bourse made a quick recovery, led by the exploration and production sector. Later, it wiped out all the day’s losses and touched the intra-day high at 62,850.09 points.

Investors were hopeful that the International Monetary Fund (IMF) board meeting, scheduled for January 11, would approve the release of second loan tranche of $700 million. Expectations of more foreign assistance and the continued rupee stability provided a further boost to the market’s mood.

“Stocks showed a sharp recovery after the government slashed rates of return on National Saving Schemes up to 160 basis points, which is likely to provide further investor support to the PSX,” said Arif Habib Corp MD Ahsan Mehanti.

“Speculation ahead of the IMF board meeting on January 11 to discuss the release of $700 million loan tranche, expected foreign inflows and rupee stability played the role of catalysts in bullish close of the market.”

At close, the benchmark KSE-100 index recorded gains of 245.56 points, or 0.39%, and settled at 62,693.57.

Topline Securities, in its report, wrote that Pakistan equities began the day by extending losses from the previous trading sessions. Later, a bullish trend was witnessed, leading to a positive close. “The index traded within a range of 1,099 points, reaching intra-day high of 62,850 (+402.08 points) and low of 61,750.97 (-697.04 points),” it said.

Collectively, positive contribution came from oil marketing companies and refineries, such as Pakistan Petroleum, Pakistan State Oil, Oil and Gas Development Company, Cnergyico and Attock Refinery, which added 183 points to the index.

On the contrary, Dawood Hercules Corporation, MCB Bank and Engro Corp lost 133 points, Topline added.

Arif Habib Limited (AHL), in its review, noted that the market witnessed a low of 61k but it stabilised. The advancers-to-decliners ratio came in at 67:29.

“Heading into the last session of the week, support is expected at 61k with resistance staying at 64k,” it added.

JS Global analyst Mubashir Anis Naviwala said that high volatility marked another trading session at the PSX.

The KSE-100 index initially experienced a decline of 1.1% before making a strong recovery to finish trading with gains of 245 points, he said. E&P sector led the market with Oil and Gas Development Company (+1.7%) and Pakistan Petroleum (+2%) closing positive with healthy volumes.

“Going forward, we expect the uptrend to continue and recommend investors to avail of any downside as an opportunity to buy stocks in banking, cement and E&P sectors,” the analyst added.

Overall trading volumes decreased to 812.4 million shares against Wednesday’s tally of 1.19 billion. The value of shares traded during the day was Rs16.7 billion.

Shares of 358 companies were traded. Of these, 251 stocks closed higher, 93 dropped and 14 remained unchanged.

K-Electric was the volume leader with trading in 209.4 million shares, losing Rs0.17 to close at Rs5.60. It was followed by Cnergyico PK with 101.6 million shares, gaining Rs0.6 to close at Rs5.49 and WorldCall Telecom with 59.8 million shares, gaining Rs0.03 to close at Rs1.58.

Foreign investors were net sellers of shares worth Rs187.3 million, according to the NCCPL.

Published in The Express Tribune, December 22^nd, 2023.

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