Political clarity tosses stocks above 64,500
A sign of the Pakistan Stock Exchange is seen on its building in Karachi, Pakistan January 11, 2016. PHOTO: REUTERS
Pakistan Stock Exchange (PSX) on Thursday extended its bullish run from the previous session as buoyant investors resorted to hefty buying over the commencement of formal legislative proceedings, propelling the KSE-100 index higher by over 870 points.
Earlier, the trading session kicked off with a spike as the newly elected members of National Assembly (NA) were sworn in after President Dr Arif Alvi approved the holding of first post-poll session of the lower house of parliament at the eleventh hour.
Despite reservations, the president called the NA session to put an end to speculations, which eased political uncertainty, bolstered investor confidence and provided an opportunity to the market to post growth.
Besides clarity on the political front, China agreed on a $2 billion debt rollover on existing terms after initially seeking a price hike. This further boosted the stock market.
The bourse sustained the uptrend throughout the day and touched the intra-day high of 64,801.63 points in the second half. In addition, rupee stability also helped the index surge past the 64,500 barrier.
“Stocks closed bullish after the president summoned NA session for setting up the new government, which eased political noise,” said Arif Habib Corp MD Ahsan Mehanti.
“Easing political uncertainty, rupee stability and rollover of $2 billion of Chinese debt played the role of catalysts in bullish close at the PSX.”
At close, the benchmark KSE-100 index recorded a surge of 875.07 points, or 1.37%, and settled at 64,578.52.
Topline Securities, in its report, said a positive session was observed at the PSX where the index extended the previous day’s gains.
“This positivity can be attributed to the maiden session of the 16th National Assembly where the newly elected representatives took oath. This increased investor confidence as the country headed towards fulfilling the democratic process where the new government will take charge,” it said.
Read PSX’s top firms hit record profit
Major positive contribution to the index came from Engro Fertilisers, Millat Tractors, Pakistan Petroleum, Hub Power, United Bank and Meezan Bank as they cumulatively contributed 516 points, Topline added.
Arif Habib Limited (AHL) remarked that the KSE-100 gained 4.19% month-on-month and finally moved through 64,000 to the new target of 65,300.
“According to the Ministry of Finance, the Consumer Price Index is expected to ease to 23.5%-24.5% in March, due to a decrease in prices of perishable items on the back of better crop yields and smooth supplies with a high base effect,” it said.
For March, the index should see new record highs above 67,000 with support in the 63k-64k zone, AHL added.
JS Global analyst Mohammed Waqar Iqbal said the market opened positive where major investor interest was seen in cement, banking and exploration and production sectors.
“Political clarity was the key reason for the positive sentiment,” he said. “Going forward, we recommend investors to view any downtrend as an opportunity to buy stocks in cement, banking and oil sectors,” the analyst added.
Overall trading volumes decreased to 424.04 million shares against Wednesday’s tally of 461.4 million. The value of shares traded during the day was Rs17.05 billion.
Shares of 364 companies were traded. Of these, 188 stocks closed higher, 161 dropped and 15 remained unchanged.
K-Electric was the volume leader with trading in 54.96 million shares, gaining Rs0.11 to close at Rs4.90. It was followed by Hascol Petroleum with 31.9 million shares, gaining Rs0.03 to close at Rs8.01 and Kohinoor Spinning Mills with 19.8 million shares, gaining Rs0.01 to close at Rs4.69.
Foreign investors were net buyers of shares worth Rs1.15 billion, according to the NCCPL.
Published in The Express Tribune, March 1st, 2024
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.