Pakistan Stock Exchange (PSX) made a marginal recovery in late trading on Friday as it crept up 30 points due to a strong earnings outlook for banking and auto sectors.
Earlier, trading got off to a positive start, with the KSE-100 index reaching its intra-day high of 85,750.18 points. However, the early momentum petered out as the index slipped below the 85,000 mark, hitting the intra-day low of 84,774.45 points before midday.
Despite the lacklustre performance, the State Bank of Pakistan's (SBP) revision in exposure limits for small and medium enterprises (SMEs), a 25% year-on-year (YoY) surge in September car sales and record remittances of $2.8 billion for the month were the catalysts that lifted the market.
Additionally, news of five independent power producers (IPPs) agreeing to early termination of power purchase agreements also helped improve the market outlook. Consequently, the bourse erased all losses and ended trading with thin gains.
"Stocks showed recovery in late-session buying, led by banking and auto shares, on a strong earnings outlook," said Ahsan Mehanti, Managing Director of Arif Habib Corp.
"SBP's revision of exposure limits for SMEs, upbeat data of car sales, which surged 25% YoY in September, and record remittances of $2.8 billion played the role of catalysts in positive close at the PSX."
At the close of trading, the KSE-100 index registered a slight rise of 30.18 points, or 0.04%, and settled at 85,483.40.
Topline Securities, in its commentary, noted that negotiations with IPPs where five of them agreed for early termination of agreements changed market sentiment.
It said the KSE-100 largely traded in negative zone, touching the intra-day low of 679 points. "However, recovery was observed in closing hours when the index settled slightly above Thursday's level."
Major positive contribution came from Pakistan State Oil, Fauji Fertiliser, Engro Fertilisers, Pioneer Cement and United Bank, which cumulatively contributed 276 points to the index.
On the flip side, Hub Power, Lucky Cement, Habib Bank, TRG Pakistan and Service Industries pulled the index down by 327 points, Topline added.
Arif Habib Limited (AHL), in its report, stated that the PSX recorded a "strong 2.2% gain on the week as the KSE-100 moved to new all-time highs."
On Friday, 50 shares rose while 46 fell with the biggest contribution to the index coming from Pakistan State Oil (+5.16%), Fauji Fertiliser (+1.25%) and Engro Fertilisers (+1.66%), AHL said.
JS Global analyst Mohammed Waqar Iqbal observed that the bourse remained under pressure throughout the day as concerns over IPP contracts led investors to offload their positions in the sector.
"We recommend booking profits at current levels and waiting for dips before considering further buying," the analyst added.
Overall trading volumes increased to 560.7 million shares compared with Thursday's tally of 503.7 million. The value of shares traded during the day was Rs26.1 billion.
Shares of 435 companies were traded. Of these, 130 stocks closed higher, 251 declined and 54 remained unchanged.
Hub Power was the volume leader with trading in 58.2 million shares, losing Rs5.83 to close at Rs106.90. It was followed by Pakistan Telecommunication Company with 51.35 million shares, gaining Rs1.18 to close at Rs15.70 and WordCall Telecom with 45.7 million shares, losing Rs0.02 to close at Rs1.18. During the day, foreign investors sold shares worth Rs125.03 million, according to the NCCPL.
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