PSX hits peak on better economic indicators

Index settles at 94,996 as C/A surplus boosts investor confidence

KARACHI:

Pakistan Stock Exchange (PSX) extended its rally on Monday, hitting a new all-time high of 94,996, buoyed by a positive shift in the economic outlook as October's current account posted a surplus of $349 million compared to a deficit of $287 million last year.

Investor sentiment surged, with the market reacting positively to the government's ongoing reforms at state-owned enterprises (SOEs) and negotiations with the independent power producers (IPPs).

Additionally, the finance minister's dismissal of a mini-budget, coupled with encouraging talks with the IMF, fueled optimism at the bourse.

"Stocks closed at a new all-time high on reports of current account surplus of $349 million in October," said Ahsan Mehanti, Managing Director of Arif Habib Corp.

Investors weighed the surging forex reserves, the government's decision on SOE reforms, IPP pricing, the finance minister ruling out a mini-budget and positive meetings with the IMF, which spurred bullish activity at the PSX, he said.

At the close of trading, the benchmark KSE-100 index posted an increase of 232.03 points, or 0.24%, and settled at 94,995.67.

Arif Habib Limited (AHL), in its report, stated that the KSE-100 index closed above the 95,000 mark in the first session of the week, reflecting a positive market sentiment.

A total of 44 shares advanced while 54 declined. Key contributors to the index gains were Fauji Fertiliser Company (FFC, +1.8%), HBL (+3.35%) and Pakistan Services (+7.98%). On the downside, the largest drags were UBL (-1.25%), Engro Fertilisers (-1.4%) and Hubco (-1.2%).

Among corporate news, FFC raised its offer for the acquisition of 151 million shares of Agritech Limited, now offering Rs39.05 per share, up from its previous offer of Rs38.84, it said.

On the macroeconomic front, Pakistan's October current account posted a surplus of $349 million compared to a deficit of $287 million in the same month of last year, signalling an improvement in the country's external account position, AHL said.

Looking ahead, according to the report, near-term support for the market remains around the 94,000 level.

Topline Securities remarked that the KSE-100 closed with a gain of 232 points. The market maintained its positive trajectory, reaching the intra-day high of 95,308 and the low of 94,620, it said, adding that investor confidence was lifted by an encouraging IMF statement.

Key contributors to the index's upward movement included FFC, HBL, Pakistan Services, SNGPL and Lucky Cement, collectively adding 328 points, Topline said.

JS Global analyst Mubashir Anis Naviwala said in his report that the PSX posted strong gains, surpassing the 95,300 intra-day resistance level with healthy trading volumes.

The market rallied 544 points to hit a new peak of 95,308 before closing at 94,996, up 232 points, he said.

"Moving forward, we recommend a buy-on-dips approach with a focus on cement, E&P and technology sectors," the analyst said.

Overall trading volumes increased to 765.2 million shares compared with Friday's tally of 893.2 million. The value of shares traded during the day was Rs23.9 billion.

Shares of 457 companies were traded. Of these, 192 stocks closed higher, 220 fell and 45 remained unchanged.

Hascol Petroleum was the volume leader with trading in 85.1 million shares, gaining Rs1 to close at Rs9.24. It was followed by Fauji Foods with 60.5 million shares, losing Rs0.06 to close at Rs11.55 and K-Electric with 58.4 million shares, gaining Rs0.13 to close at Rs5.17.

During the day, foreign investors sold shares worth Rs408.3 million, according to the NCCPL.