Stocks surge ahead of earnings season
Shares of 345 companies were traded. At the end of the day, 75 stocks closed higher, 254 declined and 16 remained unchanged. PHOTO: FILE
Pakistan Stock Exchange (PSX) on Tuesday displayed a significant bullish momentum ahead of the corporate earnings season and owing to the modest Consumer Price Index (CPI)-based inflation rate of 12.6% year-on-year for June 2024.
The market kicked off trading at the intra-day low of 78,978.54 points, but the KSE-100 index gradually moved upwards, driven by surging global crude oil prices, which bolstered expectations of robust dividend payouts from state-owned oil companies.
Additionally, the optimism surrounding talks with the International Monetary Fund (IMF) for a new loan programme fueled investor interest in favourable stocks.
As a result, the market crossed the crucial 79,000 barrier and reached the intra-day high of 79,740.35 points. Key sectors that helped power the upward momentum were fertiliser, exploration and production (E&P), and banking. The bourse closed the day near its peak with significant gains.
“Stocks closed bullish ahead of the corporate earnings season as investors weighed the upbeat data of CPI inflation that stood at 12.6% YoY in June 2024 with the average headline inflation for FY24 at 23.4%,” said Ahsan Mehanti, MD of Arif Habib Corp.
“Surging global crude oil prices, expectations of strong dividend payouts by state-owned oil companies and positive talks for an IMF bailout deal played the role of catalysts in bullish activity at the PSX.”
At the end of trading, the benchmark KSE-100 index recorded a surge of 728.55 points, or 0.92%, and settled at 79,552.89.
Topline Securities, in its report, said Pakistan’s equity market saw positive movement on Tuesday. “The KSE-100 index reached the intra-day high of 79,740 (+916 points) and closed at 79,553 (up 729 points, or 0.92%),” it said.
Fertiliser, E&P and banking sectors were the key contributors, from which Fauji Fertiliser, Pakistan Petroleum, the National Bank of Pakistan, International Industries and United Bank collectively added 340 points to the index, Topline added.
Arif Habib Limited (AHL), in its report, remarked that there were additional gains for the KSE-100, which took it back towards the top of the 78,000-80,000 range.
Some 67 shares rose while 27 fell with Fauji Fertiliser (+4.37%), Pakistan Petroleum (+2.4%) and the National Bank of Pakistan (+9%) being the biggest contributors to the index gains, AHL said, adding that Pakistan Services (-3.07%), Ibrahim Fibres (-7.5%) and Mari Petroleum (-0.52%) were the largest downside contributors.
JS Global analyst Mubashir Anis Naviwala wrote that the market opened on a positive note, extending the previous day’s bull run with intra-day rise of 916 points.
“Looking ahead, we recommend a buy-on-dips strategy, particularly focusing on the cement, E&P and technology sectors,” the analyst added.
Overall trading volumes increased to 413.2 million shares compared to Monday’s tally of 306.04 million. The value of shares traded during the day stood at Rs16.6 billion.
Shares of 431 companies were traded. Of these, 246 stocks closed higher, 128 fell and 57 remained unchanged.
WorldCall Telecom led the volumes with trading in 23.8 million shares, gaining Rs0.02 to close at Rs1.27. It was followed by K-Electric with 23.1 million shares, gaining Rs0.16 to close at Rs4.73 and the National Bank of Pakistan with 20.1 million shares, gaining Rs3.42 to close at Rs41.44.
Foreign investors were net sellers of shares worth Rs2.78 million, according to the NCCPL.