The Pakistan Stock Exchange (PSX) witnessed a notable recovery on Monday, driven by investor optimism regarding breakthroughs in coalition government negotiations, effectively mitigating ongoing political uncertainty.
In the morning, the trading session commenced on a lacklustre note, touching an intraday low of 59,191.85 points. Despite this initial dip, investor confidence rebounded following the Supreme Court’s postponement of a hearing challenging the validity of the February 9 elections. Consequently, the KSE-100 index started to climb.
Additionally, Fitch Ratings’ affirmation of an imminent coalition government, a surge in foreign exchange reserves, and the recent inclusion of 22 firms in the frontier market and small-cap index by Morgan Stanley Capital International’s (MSCI) further lifted the index. Resultantly, the market crossed the significant 60,00 barrier, reaching an intraday high of 60,504.48 points in its final hours of trading.
The bourse concluded the day near its peak, reporting substantial gains.
“Stocks showed sharp recovery on investor speculations over a major breakthrough in negotiations over the coalition government setup later today, easing political instability,” said Arif Habib Corp MD Ahsan Mehanti.
“Fitch Ratings’ assertion on all set for the coalition government, surging foreign exchange reserves, and MSCI’s inclusion of 22 firms to the frontier market and small-cap index last week played a catalyst role in the bullish close in the post-election rally at PSX.”
At the close, the benchmark KSE-100 index recorded gains of 586.78 points, or 0.98%, settling at 60,459.74.
Topline Securities noted in its report that the “KSE 100 Index opened on a negative note as the index declined to make an intraday low of -681 points. However, investors came in to accumulate after the Supreme Court on Monday postponed the hearing of the petition that sought to declare the February 8 national elections as ‘null and void’ due to the petitioner’s non-appearance.”
Major positive contributions to the index came from Oil and Gas Development Company, Pakistan Petroleum, Hub Power Company, Engro Corporation, and Bank Al Habib as they cumulatively contributed 419 points to the index. On the flip side, United Bank, Nestle Pakistan, Colgate-Palmolive, Dawood Hercules Corporation, and Pakistan Oilfields lost value, weighing down on the index by -88 points, Topline added.
Read Post-election turmoil takes toll on PSX
Arif Habib Limited (AHL) observed in its report the intraday low of 59,191 in early doors, before a strong rally to close +1.18% DoD.
“51 stocks rose while 39 fell with Oil and Gas Development Company (+7.04%), Pakistan Petroleum (+6.42%), and Hub Power Company (+2.36%) being the biggest contributors to index gains,” it said, adding that the political situation remains fluid, which is expected to keep volatility in the market high.
JS Global analyst Mohammed Waqar Iqbal noted that the KSE-100 index opened in the red owing to continued political uncertainty but eventually gained to close at 60,460, gaining 587 points.
“Going forward, a cautious approach is recommended. Investors are recommended to wait for dips before engaging in fresh accumulation,” the analyst added.
Overall trading volumes decreased to 261.7 million shares against Friday’s tally of 314.2 million. The value of shares traded during the day was Rs9.91 billion.
Shares of 330 companies were traded, with 170 stocks closing higher, 139 dropping, and 21 remaining unchanged.
Pakistan International Airlines Corp led in volume with trading in 21.41 million shares, gaining Rs0.89 to close at Rs11.06. It was followed by WorldCall Telecom Limited with 20.03 million shares, gaining Rs0.02 to close at Rs1.23, and Pakistan Refinery with 15.2 million shares, gaining Rs1.14 to close at Rs25.33.
Foreign investors were net sellers of shares worth Rs291.34 million, according to NCPL.
Published in The Express Tribune, February 20th, 2024.
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