PSX rebounds on renewed interest

KSE-100 index surges 3.05%, driven by upbeat economic indicators

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KARACHI:

Pakistan Stock Exchange (PSX) on Friday made a strong comeback following intense selling pressure over the past few days as investors showed renewed confidence in market resilience and pushed the KSE-100 index up by over 3,000 points.

Analysts attributed the surge to a combination of factors including the government's deliberations on the privatisation of state-owned enterprises (SOEs), the resolution of independent power producers' (IPPs) capacity payment issue, surging exports, rising foreign exchange reserves and the stability of the rupee.

Despite pressure in the past three consecutive trading sessions, investors saw an opportunity in the market's dip, triggered by expectations of a further reduction in the policy rate.

Ahsan Mehanti of Arif Habib Corp commented that stocks closed bullish, led by across-the-board activity on strong valuations.

He added that the government's deliberations on the privatisation of SOEs, resolution of the IPPs' contract issue and upbeat economic indicators such as surging exports, higher forex reserves and rupee stability played the role of catalysts in the surge at the PSX.

At the end of trading, the benchmark KSE-100 index recorded a gain of 3,238.17 points, or 3.05%, and settled at 109,513.15.

In its market review, Topline Securities commented that after remaining under pressure for three consecutive trading sessions, the KSE-100 index rebounded on Friday.

Investors came in to purchase shares during the market's dip as they factored in a low interest rate environment where a further cut was expected in the monetary policy, it said.

Traded value-wise, Mari Petroleum (Rs5.95 billion), Pakistan State Oil (Rs2.73 billion), Hub Power (Rs2.58 billion), Attack Refinery (Rs1.51 billion) and Fauji Fertiliser Company (Rs1.46 billion) dominated the activity.

Major positive contribution to the index came from Fauji Fertiliser Company, Mari Petroleum, Systems Limited, Hub Power, UBL, MCB Bank and Bank Alfalah, which cumulatively contributed 1,587 points, Topline added.

In its report, Arif Habib Limited (AHL) noted that the KSE-100 index recorded its "most notable weekly decline since December 2023 with a fall of 4.2% week-on-week."

On Friday, 87 shares rose while 13 fell with Fauji Fertiliser Company (+3.94%), Mari Petroleum (+5.96%) and Systems Limited (+8.5%) contributing the most to the index gains. On the other hand, Pakistan Services (-2.2%), EFU General Insurance (-5.14%) and Indus Motor (-0.76%) were the largest drags, it commented.

AHL added that the counter-trend rally, flagged a day ago, "is now underway and has the potential to last one to two weeks."

JS Global analyst Muhammad Hasan Ather stated that the KSE-100 index rebounded 3,238 points, or 3%, after a significant 4,795-point drop the previous day.

He noted that the recovery was driven by a sense of stabilisation following recent heavy selling as investors regained confidence. The market saw a healthy correction after a strong rally in previous weeks, he said.

With positive economic indicators and the recent rate cut, the outlook for the market remained upbeat, suggesting continued recovery and potential growth in the near term, the analyst added.

Overall trading volumes decreased to 754.9 million shares compared with Thursday's tally of 1.17 billion.

Shares of 459 companies were traded. Of these, 281 stocks closed higher, 119 fell and 59 remained unchanged.

WorldCall Telecom was the volume leader with trading in 99.9 million shares, gaining Rs0.08 to close at Rs1.6. It was followed by Pace (Pak) Limited with trading in 43.3 million shares, gaining Rs0.96 to close at Rs7.19 and K Electric with 40.6 million shares, gaining Rs0.1 to close at Rs5.32.

During the day, foreign investors sold shares worth Rs414.9 million, the NCCPL reported.