Pakistan Stock Exchange (PSX) on Tuesday showed signs of recovery as investors anticipated the resolution of the longstanding circular debt crisis in the power sector.
According to analysts, the market, which gained nearly 200 points, was encouraged by reports that the International Monetary Fund (IMF) was ready to conditionally approve Pakistan's Rs1.5 trillion worth of circular debt management plan. The recovery was also supported by speculation surrounding the end of March quarter, debt rollover by China and surging global crude oil prices.
Despite a volatile session where the KSE-100 index fluctuated between the intra-day high of 464 points and low of 561 points, it managed to close higher by 193 points.
According to Ahsan Mehanti of Arif Habib Corp, stocks showed recovery, led by oil shares, as investors eyed the resolution of power sector's circular debt crisis. It came amid reports of the IMF's conditional readiness to approve the Rs1.5 trillion worth of circular debt management plan.
He added that speculation ahead of the end of March quarter, China's debt rollover and surging global crude oil prices played the role of catalysts in bullish close at the PSX.
At the end of trading, the benchmark KSE-100 index recorded an increase of 193.55 points, or 0.17%, and settled at 116,633.17.
In its review, Topline Securities commented that the local bourse experienced a volatile session, attempting to recover from the previous day's sharp sell-off.
The index initially showed strength and climbed 464 points to reach the intra-day high as buying activity resurfaced. However, the momentum proved short-lived, with profit-taking pushing the index down to the intra-day low of 561 points, Topline noted.
Despite the turbulence, the market managed to regain some ground, closing at 116,633, up 194 points. The volatility could be attributed to the lack of clarity regarding the IMF review and staff-level agreement, which kept investors cautious, it said.
The positive momentum was largely supported by Oil and Gas Development Company (OGDC), Hub Power, Pakistan State Oil (PSO), Meezan Bank and Sui Northern Gas Pipelines, which added 394 points to the index.
During the day, Pak Elektron announced its 4QCY24 results, reporting earnings per share (EPS) of Rs0.58 and taking its CY24 EPS to Rs2.72, with no cash payout, Topline added.
Arif Habib Limited (AHL) reported that stock prices dipped into the 115,000-116,000 support zone before closing the day up.
Some 43 shares rose while 50 fell with OGDC (+2.76%), Hub Power (+2.01%) and PSO (+2.94%) contributing the most to the index gains. On the flip side, Systems Limited (-1.71%), TRG Pakistan (-5.78%) and UBL (-0.77%) were the biggest drags, it said.
Following Monday's decline, the KSE-100 was behaving well and bounced back from lows, AHL said, adding that they continued to look for the 115-116k range to provide support and propel the index back into the 120k range.
JS Global analyst Muhammad Hasan Ather commented that range-bound activities were observed at the PSX with thin volumes as investors preferred to stay on sidelines ahead of a long weekend.
Investors were reluctant to take fresh positions owing to uncertainty about the clearance of circular debt and approval of the IMF's review, Ather remarked. The KSE-100 moved between a band of 1,025 points during the day, eventually closing up 193 points.
"We advise investors to consider any dip as a buying opportunity with a focus on oil & gas, technology and auto sectors," he added.
Overall trading volumes decreased to 268.1 million shares compared with Monday's tally of 312 million. Shares of 436 companies were traded. Of these, 155 stocks closed higher, 214 fell and 67 remained unchanged. The value of shares traded during the day was Rs19.5 billion.
Pak Elektron was the volume leader with trading in 23.5 million shares, gaining Rs0.03 to close at Rs45.90. It was followed by TRG Pakistan with 22.8 million shares, falling Rs4.06 to close at Rs66.14 and Cnergyico PK with 14.5 million shares, remaining unchanged at Rs7.94. During the day, foreign investors bought shares worth Rs250.6 million, the NCCPL reported.
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