PSX recoups losses, surpasses 64,000 mark

KARACHI:

Despite early volatility, the Pakistan Stock Exchange (PSX) managed to notch up significant gains on Tuesday, surpassing the 64,000 barrier in a rally powered by the strengthening rupee and foreign corporate inflows.

In the morning, the bourse made a bearish start and dropped to its intra-day low at 63,549.60 points. The dip came on the back of selling pressure, which emerged following the Ministry of Finance’s rejection of a debt settlement plan in line with the commitment to the International Monetary Fund (IMF) to restrict unbudgeted spending.

However, just before the second half of the day, bullish activity took place with investors resorting to significant stock buying. They capitalised on the opportunity provided by lower stock valuations due to the government’s resolve to address the circular debt crisis along with easing of border tensions.

Consequently, the KSE-100 index reached its intra-day high at 64,658.17 points in the final trading hours. Notably, improved trading volumes were seen in banking and cement stocks. The market closed near the day’s peak with substantial gains.

“Stocks closed higher in an earnings season rally on strong rupee and foreign corporate inflows,” said Arif Habib Corp MD Ahsan Mehanti.

“Government’s resolve to settle power sector circular debt and easing of border tensions played the role of catalysts in bullish close at the PSX.”

At close, the benchmark KSE-100 index recorded a surge of 514.81 points, or 0.81%, and settled at 64,454.22.

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Topline Securities, in its report, noted that Pakistan equities experienced significant volatility with the index showing a wide range of fluctuations.

“At the outset, Oil and Gas Development Company and Pakistan Petroleum faced bearish pressure as investors responded unfavourably to the Ministry of Finance’s rejection of the circular debt reduction plan,” it said, adding that the decision reflected the government’s commitment to the IMF, which restricted additional unbudgeted spending in fiscal year 2023-24.

Banking and cement stocks displayed improved trading volumes, with notable performance from Habib Bank (+0.88%), Meezan Bank (+2.04%), Bank Alfalah (+1.22%), DG Khan Cement (+2.25%) and Fauji Cement (+2.15%), all closing higher than their previous day’s levels, Topline added.

Arif Habib Limited (AHL), in its review, remarked “so far so good….64,000 is now the support and 65,500 is the next hurdle as the KSE-100 attempts to reach a new high ahead of elections”.

“Objections raised by the finance ministry to the circular debt reduction plan tailoured by the caretaker minister of power and petroleum led to a weak opening and volatility around 64,000,” it said.

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JS Global analyst Muhammad Shuja Qureshi noted that after an initial drop of 390 points, the KSE-100 index recovered to close at 64,454, up 515 points.

“Going forward, investors are advised to book gains on the higher side and wait for dips to accumulate value stocks,” the analyst added.

Overall trading volumes increased to 425.7 million shares against Monday’s tally of 298.7 million. The value of shares traded during the day was Rs24.99 billion.

Shares of 354 companies were traded. Of these, 209 stocks closed higher, 127 dropped and 18 remained unchanged.

Oil and Gas Development Company was the volume leader with trading in 52.9 million shares, gaining Rs2.97 to close at Rs136.50. It was followed by Fauji Foods with 44.9 million shares, gaining Rs0.8 to close at Rs10.92 and K-Electric with 28.4 million shares, losing Rs0.11 to close at Rs5.46.

Foreign investors were net sellers of shares worth Rs789.5 million, according to the NCCPL.

Published in The Express Tribune, January 24^th, 2024.

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