Bulls once again displayed their horns at the Pakistan Stock Exchange (PSX) on Wednesday after a massive crash a day ago as the KSE-100 index recovered nearly 1,700 points ahead of year-end.
With the commencement of trading, the index continued its previous day’s momentum, but soon the market soared with the revival of investor interest particularly in index-heavy sectors including power, banks, technology, fertiliser and cement.
In the previous session, the market had lost over 2,500 points in a major correction where investors resorted to heavy profit-taking at high stock valuations.
On Wednesday, the bourse rose steadily with some ups and downs. Towards the close, growing investor confidence helped the index advance more rapidly and it touched the intra-day high at 61,009.87 points. The market closed in the green after dropping a few points.
“Stocks showed a sharp recovery ahead of the close of the year on institutional buying of oversold shares,” remarked Arif Habib Corp MD Ahsan Mehanti.
“Surge in global crude oil prices, rupee stability, imminent release of $700 million in International Monetary Fund (IMF) tranche and $350 million in World Bank financing next month played the role of catalysts in bullish close at the PSX.” At close, the benchmark KSE-100 index recorded a smart recovery of 1,692.64 points, or 2.86%, and settled at 60,863.62.
Topline Securities, in its report, stated that Pakistan equities had a “recovery day”.
“The day initially carried forward Tuesday’s bearish momentum when the index hit its intra-day low at 58,758 (-413 points, or 0.70%). However, value hunters rescued the market, which ultimately led to across-the-board buying,” it said.
Read PSX slumps on heavy profit-taking
Power, banks, tech, fertiliser and cement sectors enjoyed considerable buying interest where Hub Power, Meezan Bank, Systems Limited, Engro Fertilisers and Lucky Cement positively contributed 481 points to the index, Topline added.
Arif Habib Limited (AHL), in its review, noted “now the KSE-100 needs to regain and hold 61,000 by the end of the week to suggest a low is in place and bring new highs into focus”.
“The focus in the last two trading sessions of the year will be on having large-cap stocks above November 30 close to mitigate the FTSE downgrade risk,” it said.
Overall trading volumes decreased to 669.4 million shares against Tuesday’s tally of 670.9 million. The value of shares traded during the day was Rs16.1 billion.
Shares of 357 companies were traded. Of these, 274 stocks closed higher, 63 dropped and 20 remained unchanged. K-Electric was the volume leader with trading in 102.2 million shares, gaining Rs0.45 to close at Rs4.89. It was followed by Fauji Foods with 58.1 million shares, gaining Rs0.75 to close at Rs11.25 and Pakistan Telecommunication Company with 55.4 million shares, gaining Rs0.04 to close at Rs12.25.
Foreign investors were net sellers of shares worth Rs92.2 million, according to the NCCPL.
Published in The Express Tribune, December 28th, 2023.
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