PSX stages sharp recovery
Foreign funds would divert their liquidity into buying Pakistan’s stocks. This would merely increases prices of shares and be profitable for those who already hold stocks. PHOTO: FILE
The Pakistan Stock Exchange (PSX) staged a robust recovery on Friday, with the benchmark KSE-100 Index surging around 3,650 points, trimming some of Thursday's steep losses. Investor sentiment improved sharply amid optimism over the upcoming International Monetary Fund's (IMF) Executive Board meeting, which was expected to approve the Extended Fund Facility (EFF) and a potential $1.3 billion Resilience and Sustainability Facility (RSF).
Market morale was further boosted by signs of de-escalation in cross-border tensions following a US call for restraint. Major gains came from heavyweight stocks such as cement, energy, and power. "Stocks staged sharp recovery as investor eyed de- escalation in Pak-India tensions after US appeal for end to violence and IMF board approval disbursement of $1bn under EFF and additional arrangement for $1.3billion under RSF," Arif Habib Corp MD Ahsan Mehanti said.
"The State Bank of Pakistan's policy easing and a surge in global crude oil prices were the catalysts in the record bullish close at PSX", he added.
At the close of trading, the benchmark KSE-100 index recorded a gain of 3,647.82 points, or 3.52%, and settled at 107,174.64.
According to Arif Habib Limited (AHL), the PSX staged a strong recovery on Friday, gaining 3.52% day-on-day, which helped trim the weekly loss to 6.1%.
A total of 85 stocks advanced while 14 declined, with Lucky Cement Limited (+6.74%), Mari Petroleum (+6.21%), and Hub Power (+5.69%) contributing the most to the index's gains.
On the downside, Pakgen Power (-7.36%), Pakistan Services (-3.76%), and Unity Foods (-2.62%) were the key laggards.
There were no major new developments in the India-Pakistan conflict reported during the day.
Among fiscal news, Workers' remittances rose 13.1% year-on-year in April to $3.2 billion. The federal budget for the upcoming fiscal year is scheduled to be presented in parliament on June 2.
AHL projected next week's levels to reach 100,000 and 115,000 points.
Topline Securities wrote that the recovery was on account of optimism on IMF Executive Board meeting scheduled to consider EFF programme, where market expects smooth approval. Overall decline in cross border hostilities also provided stimulus to investor sentiment.
Top positive contributions to the index were sectors such as energy, power, cement, exploration and production as they cumulatively contributed +1,923 points.
The Pakistan Stock Exchange (PSX) has fallen over 13% following escalating tensions with India after the April 22 Pahalgam attack and subsequent Indian military action.
However, AL Habib Capital Markets (AHCML) noted that historically, such declines are short-lived. Past conflictssuch as the 2001 standoff, the 2016 surgical strikes, and the 2019 Balakot airstrikesaw markets fall by 325%, only to recover once tensions eased.
AHCML expects a similar rebound now, particularly as the IMF talks for a $1.3 billion tranche is progressing and no long-term sanctions or economic fallout appear imminent.
Overall, trading volumes stood at 516.3 million shares, slightly lower compared to the previous session's 653.6 million shares. The total traded value for the day was Rs28.8 billion, down from Rs35.4 billion in the previous session.
A total of 441 companies were traded in the ready market, out of which 300 stocks closed higher, 99 declined, and 42 remained unchanged.
WorldCall Telecom led the volume chart with 47.1 million shares, gaining Rs0.06 to close at Rs1.16. Cnergyico PK followed with 33.6 million shares, gaining Rs0.70 to settle at Rs6.42. Sui South Gas saw trading of 29.3 million shares, declining by Rs1.53 to close at Rs27.69. During the day, foreign investors bought shares worth Rs638.6 million, the NCCPL reported.