Stocks rebound on upbeat inflation data

KSE-100 index gains 73.02 points, settles at 78,356.32

KARACHI:

Pakistan Stock Exchange (PSX) recorded a slim increase of 73 points on Tuesday, reversing the previous day's downtrend, in the backdrop of an encouraging Consumer Price Index (CPI) inflation reading of 9.6% for August.

In the morning, the KSE-100 index got off to a positive start and reached its intra-day high of 78,644.96 points well before midday. It came following reports of government's plans for strategic sale of blue-chip state-owned enterprises (SOEs) to foreign investors.

However, profit-taking in some sectors triggered a rapid decline, pushing the market to its intra-day low of 78,250.89 points.

Despite the dip, investor optimism over potential reduction in the State Bank of Pakistan's (SBP) policy rate and hopes of addressing the external financing challenges reignited bullish sentiment. As a result, the index regained some momentum and ended trading with thin gains.

"Stocks closed higher amid upbeat data of CPI inflation, which stood at 9.6% for August 2024, and government's plans for strategic sale of blue-chip SOEs to foreign investors," said Ahsan Mehanti, MD of Arif Habib Corp.

"Leveraged stocks outperformed on investors' hopes for a cut in SBP's policy rate and the potential resolution of external financing gap played the role of catalysts in bullish close at the PSX."

At the end of trading, the benchmark KSE-100 index registered a slight rise of 73.02 points, or 0.09%, and settled at 78,356.32.

Topline Securities, in its commentary, noted that throughout the trading session, the KSE-100 index experienced significant fluctuations, peaking at 78,645 and dropping to 78,251.

The upward movement was driven by substantial gains in key stocks such as Millat Tractors, Mari Petroleum, United Bank Limited, Oil and Gas Development Company (OGDC) and Habib Metropolitan Bank, which collectively contributed 96 points to the index, it said.

Trading was lively with a total of 432 million shares, amounting to Rs12 billion, changing hands, Topline added.

Arif Habib Limited (AHL), in its report, observed that the trading session may seem lacklustre with a flat close, however, market fundamentals suggested that it was poised for a fresh high.

Some 57 stocks rose while 43 fell with Millat Tractors (+5.1%), Mari Petroleum (+1.93%), and Oil and Gas Development Company (+0.68%) being the largest upside contributors while Meezan Bank (-0.94%), MCB Bank (-0.99%) and Bank AL Habib (-1.15%) were the biggest drags, AHL said.

JS Global analyst Mubashir Anis Naviwala commented that the stock market witnessed range-bound activity on Tuesday.

"We anticipate that range-bound trading will continue in the coming sessions. Investors are advised to consider any dips as a buying opportunity, particularly in banking, and exploration and production sectors," the analyst added.

Overall trading volumes decreased to 436.7 million shares compared with Monday's tally of 457.3 million. The value of shares traded during the day was Rs12.3 billion.

Shares of 443 companies were traded. Of these, 203 stocks closed higher, 167 dropped and 73 remained unchanged.

Kohinoor Spinning Mills was the volume leader with trading in 83.9 million shares, gaining Rs0.47 to close at Rs11.13. It was followed by Symmetry Group with 37.1 million shares, gaining Re1 to close at Rs9.99 and Agha Steel with 21.6 million shares, gaining Rs0.2 to close at Rs13.88.

Foreign investors were net sellers of shares worth Rs205.3 million, according to the NCCPL.