Pakistan Stock Exchange (PSX) on Wednesday managed to snap its losing streak with a strong recovery of over 500 points, which came on the back of a positive corporate earnings outlook and government discussion on privatisation of state-owned enterprises (SOEs).
The day began on a sluggish note, with the KSE-100 index hitting its intra-day low of 77,968.74 points, reflecting the previous losses. However, as the day progressed, the index began to climb in a see-saw movement.
Key factors contributing to the bullish momentum were the rupee recovery, rising global oil prices and drop in Karachi Inter-bank Offered Rate (Kibor). In addition, the finance minister said that the International Monetary Fund (IMF) board would take up for approval the Extended Fund Facility (EFF) for Pakistan next month.
Consequently, the market surged past the 78,000 mark, reaching its intra-day high of 78,457.37 points. The rally was notably supported by fertiliser and banking sectors. Though the index came down somewhat later, it still ended the day with significant gains.
"Stocks showed recovery on a strong earnings outlook and government deliberation on privatisation of SOEs," said Ahsan Mehanti, MD of Arif Habib Corp.
"Rupee recovery, surging global crude oil prices, drop in Kibor and finance minister's affirmation of IMF board approval for the EFF next month played the role of catalysts in bullish close at the PSX." At the end of trading, the benchmark KSE-100 index posted notable gains of 515.34 points, or 0.66%, and settled at 78,260.86.
Topline Securities, in its report, mentioned that the Pakistan stock market soared 515 points and wrapped up the day at a strong level of 78,261.
"The index showcased impressive volatility, peaking at 78,457 and dipping to 77,969 during the session," it said.
The movement was driven by a surge in fertiliser and banking sectors, with heavyweights such as the National Bank of Pakistan, Fauji Fertiliser, United Bank, Engro Fertilisers and Habib Metropolitan Bank fueling a 249-point boost, Topline added. Arif Habib Limited (AHL), in its report, observed that the KSE-100 returned back above 78,000 with increasing market breadth.
Some 73 shares rose while 25 fell with the National Bank of Pakistan (+10%), Fauji Fertiliser (+1.64%) and United Bank (+1.01%) being the biggest upside contributors to the index. Hub Power (-1.15%), Systems Limited (-0.93%) and Habib Bank (-0.67%) were the largest drags.
"Participation of cement stocks in the move higher is much needed and the increasing market breadth is positive for taking the index back towards 80,000," AHL added. JS Global analyst Mohammed Waqar Iqbal commented that optimism surrounding the imminent approval of the IMF loan programme spurred the bullish momentum.
"Buying interest was primarily concentrated in banking, fertiliser, and oil and gas sectors. Looking ahead, market sentiment will be driven by developments related to the IMF programme, restructuring of Chinese loans and upcoming monetary policy," the analyst added.
Overall trading volumes increased to 552.6 million shares compared with Tuesday's tally of 380.7 million. The value of shares traded during the day was Rs14.6 billion.
Shares of 453 companies were traded. Of these, 289 stocks closed higher, 119 fell and 45 remained unchanged.
Kohinoor Spinning Mills was the volume leader with trading in 62.9 million shares, gaining Rs1.02 to close at Rs11.23. It was followed by Power Cement with 41.96 million shares, gaining Rs0.84 to close at Rs5.79 and Yousuf Weaving Mills with 37.4 million shares, gaining Rs0.36 to close at Rs6.82.
Foreign investors were net sellers of shares worth Rs166.9 million, according to the NCCPL.
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