PSX bounces back on SBP, IMF optimism

KSE-100 index rises 74.04 points, settles at 64,890.51

KARACHI:

Pakistan Stock Exchange (PSX) on Monday experienced a modest recovery, fueled by anticipation surrounding the State Bank of Pakistan’s (SBP) monetary policy announcement and optimism about the International Monetary Fund’s (IMF) final review under its standby arrangement (SBA).

In the morning, trading began on a positive note but the KSE-100 index soon plunged to the intra-day low at 64,811.92 points. Thereafter, it recovered rapidly and after frequent ups and down, the index reached the intra-day high at 65,148.36 points.

At that point, investors got an opportunity to opt for profit-taking over caution ahead of the monetary policy announcement scheduled for around 4pm. Resultantly, the bourse fell close to its intra-day low post-midday trading, slipping below the 65,000 mark.

Nevertheless, the market rebounded, propelled by surging global crude oil prices and strengthening of the Pakistani rupee, driven by optimism surrounding the IMF’s review for the release of $1.2 billion loan tranche. Fertiliser, banking and power sectors mainly contributed positively to the index.

Despite closing below 65,000, the market managed to recover all the earlier losses, ending the day positively. “Stocks showed recovery on speculation ahead of SBP’s announcement later today (Monday) and hopes for a productive final IMF review for the release of SBA tranche,” said Ahsan Mehanti, MD of Arif Habib Corp.

Read: PSX under pressure over IMF talk concerns

“Surging global crude oil prices and stronger rupee played the role of catalysts in positive close at the PSX.”

At close, the benchmark KSE-100 index recorded an increase of 74.04 points, or 0.11%, and settled at 64,890.51. Topline Securities Deputy Head of Sales Ali Najib, in his report, said “Pakistan equities kicked off the week on a positive note as the KSE-100 index touched intra-day high at 65,148 (+332 points; or 0.51%) in the morning. However, at the day’s high, profit-taking kicked in.”

“This market behaviour can be attributed to a cautious approach adopted by investors ahead of monetary policy announcement (scheduled at around 4pm),” he said. A majority at the street expected the central bank to maintain the status quo. However, a surprise reduction in rate would be taken positively by the PSX, Najib added.

Fertiliser, banking and power sectors contributed positively to the index as Fauji Fertiliser, Meezan Bank, Hub Power, United Bank and Dawood Hercules cumulatively added 141 points.

On the flip side, Lucky Cement, Systems Limited and MCB Bank saw some profit-taking as they lost 72 points, Topline added.

Arif Habib Limited (AHL), in its report, commented that there was “a dull start to the week ahead of the SBP rate decision where views were mixed regarding the start of an easing cycle now or later in the year.”

Top index contributors were Fauji Fertiliser (+2.03%), Meezan Bank (+1.8%) and Hub Power (+0.98%), it said, adding that Pakistan Telecommunication Company (+7.58%) was the standout performer, which kept the tech sector in the limelight and had gained 29.47% month to date. JS Global analyst Mubashir Anis Naviwala said that the PSX saw range-bound activity with the KSE-100 index closing at 64,890 with gains of 74 points.

“Going forward, we recommend investors to consider any downside as an opportunity to buy stocks in banking, and exploration and production (E&P) sectors,” the analyst added.

Overall trading volumes decreased to 211.8 million shares against Friday’s tally of 259.4 million. The value of shares traded during the day was Rs7.8 billion.

Shares of 328 companies were traded. Of these, 145 stocks closed higher, 158 dropped and 25 remained unchanged.

WorldCall Telecom was the volume leader with trading in 16.6 million shares, gaining Rs0.02 to close at Rs1.36. It was followed by Hascol Petroleum with 16.3 million shares, losing Rs0.28 to close at Rs8.28 and Telecard Limited with 14.7 million shares, gaining Rs0.33 to close at Rs9. Foreign investors were net buyers of shares worth Rs110.7 million, according to the NCCPL.

Published in The Express Tribune, March 19^th, 2024.

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