Stocks extend rally surpassing 92,000 mark

Pakistan Stock Exchange (PSX) extended its record-breaking rally as it reached a new peak on Tuesday following a 2.5-percentage-point reduction in policy rate and robust remittances in October 2024.

The KSE-100 index rose 366 points, crossing the 92,000 barrier, driven by a surge in cement exports, anticipated funding of $500 million from the Asian Development Bank (ADB) and rising global crude oil prices.

Key gainers of the day were Lucky Cement, Hub Power and Oil and Gas Development Company while banking stocks weighed on the index.

"Stocks closed at a new all-time high after the surprise policy rate cut of 250 basis points (bps) and over $3 billion in remittances for October 2024," said Ahsan Mehanti, Managing Director of Arif Habib Corp. Over 50% year-on-year surge in cement exports in October, expected arrival of $500 million in ADB funding and higher global crude oil prices played the role of catalysts in record close at the PSX, he added.

At the end of trading, the benchmark KSE-100 index posted an increase of 366.32 points, or 0.4%, and settled at 92,304.32. Topline Securities, in its market review, said that the KSE-100 index continued its upward momentum, reaching the intra-day high of 576 points before closing at 92,304, up 366 points.

"This positive trend is largely attributed to the State Bank of Pakistan's (SBP) monetary policy decision, marking a fourth consecutive rate cut with a 250bps reduction that brought the policy rate to 15%," it said.

Additionally, assurances from the SBP governor about key economic indicators bolstered investor confidence. Key contributors to the surge were Lucky Cement, Hub Power, Oil and Gas Development Company, Systems Limited and Millat Tractors, which collectively added 274 points. On the flipside, United Bank Limited, Habib Bank Limited, Bank AL Habib, Cherat Cement and Meezan Bank were the major laggards, wiping off 143 points from the index, Topline added.

Arif Habib Limited, in its report, stated that a strong gap up of 570 points following a larger-than-expected rate cut marked the day's high. Some 55 shares rose while 41 declined, with Lucky Cement (+2.93%), Hub Power (+1.89%) and Oil and Gas Development Company (+1.48%) being the largest contributors to the index gains.

Banks were the biggest drags, with United Bank Limited (-0.7%), Habib Bank Limited (-1.2%) and Bank AL Habib (-1.08%) among the top decliners. AHL said that the Morgan Stanley Capital International (MSCI) review was scheduled for November 6 and Fauji Fertiliser Bin Qasim, Fauji Cement, Fatima Fertiliser, Kohat Cement, Pioneer Cement and Cherat Cement were meeting the MSCI Frontier Markets' requirements of total market capitalisation of $138 million and free float capitalisation of $69 million.

"With the potential new additions, Pakistan is likely to see an increase in its MSCI weight to over 5%."

JS Global analyst Mohammed Waqar Iqbal said that Monday's 250bps rate cut initially fueled optimism, driving the market higher and the intra-day peak of 92,514 – an all-time high.

However, local investors' profit-taking triggered a reversal, pulling the index back from its highs. After a brief correction, the KSE-100 regained momentum, closing up by 366 points.

Overall trading volumes increased to 752.7 million shares compared with Monday's tally of 589.5 million. The value of shares traded during the day was Rs32.8 billion.

Shares of 452 companies were traded. Of these, 223 stocks closed higher, 169 fell and 60 remained unchanged.

Power Cement was the volume leader with trading in 66.3 million shares, gaining Rs0.67 to close at Rs7.79. It was followed by Sui Southern Gas Company with 51.96 million shares, gaining Rs1.52 to close at Rs16.68 and Fauji Foods with 32.4 million shares, gaining Rs0.44 to close at Rs10.57.

During the day, foreign investors sold shares worth Rs97.6 million, according to the NCCPL.