With robust rally, PSX climbs to new high
Foreign funds would divert their liquidity into buying Pakistan’s stocks. This would merely increases prices of shares and be profitable for those who already hold stocks. PHOTO: FILE
Pakistan Stock Exchange (PSX) extended its bullish streak on Thursday as the KSE-100 index climbed to a new record high with gains of about 750 points, triggered by a further fall in bond yields and the increase in foreign currency reserves.
The upbeat sentiment was supported by other factors as well, notably the decline in the Consumer Price Index (CPI)-based inflation. The single-digit inflation heightened expectations of more reduction in the State Bank of Pakistan's policy rate.
In the morning, the trading started in the green and after a slight dip the market continued to advance for almost the entire day. The KSE-100 index hit the intra-day high of 82,958.73 points after midday and closed near that level with notable gains.
Significant buying interest was seen across key sectors including automobile, cement, commercial banks, fertiliser, and oil and gas exploration, which primarily contributed to the strong performance.
"Stocks reached an all-time high following a massive decline in treasury bond yields, increase in foreign exchange reserves and upbeat data showing a 14.11% year-on-year rise in exports for July-September 2024," said Ahsan Mehanti, Managing Director of Arif Habib Corp.
"Surge in global crude oil prices, combined with institutional interest ahead of the upcoming earnings season and rupee stability, contributed to the bullish close at the PSX," he added.
At the end of trading, the KSE-100 index posted gains of 754.76 points, or 0.92%, and settled at 82,721.77.
Topline Securities, in its report, stated that the PSX maintained its upward momentum as the KSE-100 surged 0.92%.
Improved trading volumes reinforced the revitalised activity in the market, it said, adding that Fauji Fertiliser Company (+8.1%) closed at the highest-ever level on the back of improved urea sales in September.
In other news, Malaysian Prime Minister Anwar Ibrahim arrived in Islamabad for a three-day visit, focusing on enhancing the strategic partnership with Pakistan, Topline said.
Arif Habib Limited (AHL), in its review, wrote that the KSE-100 index reached a new all-time high, driven by strong performance in the fertiliser sector.
Some 55 stocks rose while 42 fell, with notable positive contribution coming from Fauji Fertiliser Company (+8.22%), Engro Fertilisers (+1.78%) and Pakistan Petroleum Limited (+2.36%).
The gains pushed KSE-100's year-to-date return to 34% in US dollar terms. "Foreign supply continues to be absorbed, with mutual funds actively participating as strong buyers, having invested around $17 million week-to-date," it said.
"With no bearish signals in sight, expectations remain high for further upward movement," AHL added.
JS Global analyst Mohammed Waqar Iqbal commented that across-the-board buying was witnessed with good participation from investors in exploration and production (E&P) and fertiliser sectors.
The analyst expected the anticipated portfolio realignment by institutional players from fixed income to equities to further boost market sentiment, contributing to the bullish momentum.
Overall trading volumes decreased to 319.9 million shares compared with Wednesday's tally of 360.99 million. The value of shares traded during the day was Rs16.4 billion.
Shares of 448 companies were traded. Of these, 207 stocks closed higher, 185 declined and 56 remained unchanged.
WorldCall Telecom was the volume leader with trading in 23.2 million shares, losing Rs0.01 to close at Rs1.20. It was followed by Fauji Cement with 21.6 million shares, losing Rs0.26 to close at Rs27.15 and Fauji Fertiliser Bin Qasim with 15.3 million shares, gaining Rs2.98 to close at Rs52.83.
During the day, foreign investors sold shares worth Rs865.9 million, according to the NCCPL.