PSX resilient despite political noise

The stock market on Monday enjoyed another dynamic session, when it made a strong rebound from the early fall and closed at an all-time high above 98,000 points, influenced by robust investor interest in the banking sector and some easing of political noise.

After dipping to the intra-day low of 97,137.63 points at the beginning of trading, the KSE-100 index recovered soon and skyrocketed to the intra-day high above 99,300 points well before midday. At that point, investors resorted to profit-booking, wiping off some of the gains. The index eventually settled at 98,080 with a gain of 282 points.

In terms of volumes, top performers of the day were Hascol Petroleum with 65 million shares, Cnergyico PK with 48 million shares and Fauji Foods with 41 million shares.

Looking ahead, the market is expected to sustain its upward trend, supported by encouraging macroeconomic indicators. However, rising political uncertainties may be a barrier and force investors to move cautiously.

In his analysis, Ahsan Mehanti of Arif Habib Corp commented that stocks closed higher, led by the banking sector, on a strong earnings outlook and Islamabad High Court's ban on protests in the capital, which eased political noise.

He mentioned that mid-session pressure emerged over future contracts' rollover, uncertainty about the outcome of Pakistan Tehreek-e-Insaf (PTI) protests and geopolitical tensions. However, the Pakistan Stock Exchange (PSX) closed on a bullish note, driven by upbeat economic indicators, rupee stability and surging foreign currency reserves. At the end of trading, the benchmark KSE-100 index recorded an increase of 281.55 points, or 0.29%, to 98,079.78.

Topline Securities cited in its report that the stock market maintained the bullish trend, reaching the intra-day high of 99,317. Investor confidence was bolstered by speculation that the State Bank of Pakistan (SBP) may relax a condition for banks regarding the minimum deposit rate for savers, it said.

Key contributors to the index's upside were Bank AL Habib, United Bank Limited, Meezan Bank, Systems Limited and MCB Bank, which collectively added 555 points. Trading activity remained strong with a volume of 640 million shares and value of Rs25.6 billion. Hascol Petroleum led the volume chart, with 65 million shares changing hands during the session, Topline added.

In its research report, Arif Habib Limited (AHL) commented that the PSX saw another volatile session as early gains were eroded that restricted the KSE-100 to an increase of 0.29% day-on-day.

Some 54 shares rose while 43 fell, with Bank AL Habib (+6.75%) contributing the most to the index gains. Notable moves were seen in Sui Southern Gas Company (+10%), Waves Home Appliances (+10.05%) and Hascol Petroleum (+9.97%), it said. AHL pointed out that events in Islamabad were likely to dictate market direction as "supply is coming into the market below 100k and it may be looking for an excuse to correct". "Support remains at 94k and the current index range is 97.2k to 99.6k," it added.

JS Global analyst Mubashir Anis Naviwala wrote that the PSX posted strong gains, breaking past the 99,300 intra-day resistance on strong volumes. The market peaked at 99,317 before the KSE-100 index closed at 98,080, up 282 points.

Trading volumes were healthy, reaching 640 million shares. Hascol Petroleum, Cnergyico PK, Fauji Foods, Wordcall Telecom and K-Electric led the activity, he said.

Looking ahead, he recommended a buy-on-dips strategy with a focus on cement, exploration and production, and technology sectors.

Overall trading volumes decreased to 640.3 million shares against Friday's tally of 1.25 billion. The value of shares traded during the day was Rs25.6 billion.

Shares of 460 companies were traded. Of these, 220 stocks closed higher, 185 fell and 55 remained unchanged.

Hascol Petroleum was the volume leader with trading in 64.8 million shares, gaining Rs1.12 to close at Rs12.35. It was followed by Cnergyico PK with trading in 48.1 million shares, gaining Rs0.22 to close at Rs4.71 and Fauji Foods with 40.9 million shares, gaining Rs0.52 to close at Rs12.26.

During the day, foreign investors sold shares worth Rs1.45 billion, according to the NCCPL.