Stocks rise in volatile trading ahead of polls
Pakistan Stock Exchange (PSX) succeeded on Wednesday in maintaining its positive momentum as investors appeared optimistic about the economic and political scenario after general elections.
However, the KSE-100 index faced increased volatility despite expectations of credit rating upgrade for Pakistan post-elections, driven by a new economic roadmap.
The trading session commenced on a positive note but soon volatility gripped the bourse and the index fluctuated between green and red zones throughout the day.
The market touched its intra-day low at 63,927.28 just before midday but rebounded later to hit the intra-day high at 64,196.61 towards the close of trading, influenced by efforts to secure a new International Monetary Fund (IMF) loan deal after polls. The bourse closed the day above the 64,000 mark.
“Stocks closed higher in a pre-election rally amid speculation about S&P Global’s projection of ratings upgrade to “B” on expectations of adoption of tough reforms by the new government for an IMF deal, and falling treasury bond yields,” said Arif Habib Corp MD Ahsan Mehanti.
“An upbeat economic outlook, strong earnings in oil and banking sectors and the government’s resolve to resolve the circular debt issue played the role of catalysts in bullish close at the PSX.”
At close, the benchmark KSE-100 index recorded an increase of 344.85 points, or 0.54%, and settled at 64,143.87.
Topline Securities, in its commentary, wrote that investors at the stock market were optimistic ahead of general elections.
“This positive movement was fueled by Hub Power, Meezan Bank, Engro Fertilisers, United Bank and Bank Alfalah, which collectively contributed 197 points to the index,” Topline said.
Latest PSX faces volatility amid political uncertainty
Arif Habib Limited (AHL), in its report, commented that in the last trading session ahead of general elections, the market regained the 64,000 mark.
“The convergence of price action will likely be resolved on Friday following election results where the stronger the government will be, the more positively the market will likely react,” it said.
JS Global analyst Mohammed Waqar Iqbal noted that the stock market traded in the positive territory, albeit with lacklustre investor participation throughout the day.
“We believe that investors opted to stay away before general elections scheduled for Thursday,” he said, adding “going forward, investors are recommended to adopt a cautious approach and follow a buy-on-dips strategy in banking and exploration and production sectors.”
Overall trading volumes decreased to 327.6 million shares against Tuesday’s tally of 330.9 million. The value of shares traded during the day was Rs14.3 billion.
Shares of 356 companies were traded. Of these, 203 stocks closed higher, 125 dropped and 28 remained unchanged.
K-Electric was the volume leader with trading in 44.4 million shares, gaining Rs0.11 to close at Rs4.86. It was followed by Oil and Gas Development Company with 24.95 million shares, losing Rs4.9 to close at Rs150.67 and Pak Elektron with 21.3 million shares, gaining Rs0.81 to close at Rs23.88.
Foreign investors were net buyers of shares worth Rs395.2 million, according to the NCCPL.
Published in The Express Tribune, February 8th, 2024.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.