PSX at new peak over budget hopes

Index up 1,348 points as tax relief expectations, positive data boost interest

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KARACHI:

The Pakistan Stock Exchange (PSX) continued its record-breaking run on Wednesday as the benchmark KSE-100 index closed at an all-time high at nearly 121,800 points.

Investor sentiment remained upbeat ahead of the federal budget, buoyed by expectations of fiscal relief measures and encouraging macroeconomic indicators.

The rally was supported by a 10% year-on-year increase in petroleum product sales for May, rising cement exports and the Asian Development Bank's (ADB) approval of a $800 million financing package. Broader market gains were also driven by speculation about tax rationalisation and power tariff adjustments.

Arif Habib Corp MD Ahsan Mehanti observed that stocks closed at a new all-time high in a pre-budget rally, led by across-the-board activity, as investors weighed tax relief, power tariff cuts and the prime minister's hint at progress in budget talks with the International Monetary Fund (IMF).

"The record bullish close was driven by a 10% surge in petroleum sales for May, rising cement exports and the approval of ADB's $800 million financing that will be supportive for rupee stability," he added.

At the end of trading, the benchmark KSE-100 index advanced 1,347.99 points, or 1.12%, and settled at 121,798.87.

Topline Securities noted in its review that the bullish momentum from the previous session was carried forward, fuelled by robust buying from local institutions and corporates, as indicated by the National Clearing Company data.

The key drivers of the rally included heavyweight stocks such as National Bank, Bank AL Habib, Systems Limited, Lucky Cement and MCB Bank, which contributed 586 points to the index, it said.

Arif Habib Limited (AHL) commented in its report that the KSE-100 extended gains after breaching the 120,000 mark, rising 1.7% week-on-week ahead of the final session before Eid holidays.

Some 61 shares rose while 37 fell with National Bank (+10%), Bank AL Habib (+3.42%) and Systems Limited (+3.38%) contributing the most to index gains. In contrast, Habib Metropolitan Bank (-2.48%), Pakistan Oilfields (-0.66%) and National Foods (-2.67%) were the biggest drags.

Among corporate news, Big Bird Foods (+3.45%) announced direct export access to Alibaba's global B2B platforms while Cherat Cement (+4.49%) expressed interest in acquiring Attock Cement (-0.03%).

AHL expects that the 120k level will be built as a support and the index may advance to 130k.

KTrade Securities wrote in its market wrap that the KSE-100 index marked another historic session, closing at a new all-time high, driven primarily by strong performances in mainboard stocks, particularly the banking sector.

The sectors showing notable strength included commercial banks, technology, oil and gas and cement. Investor sentiment still remains measured amid uncertainty ahead of the federal budget announcement, it said.

JS Global analyst Mubashir Anis Naviwala said that the KSE-100 surged at the commencement of trading and maintained a strong momentum, hitting a new intra-day high and settling at a record close at 121,799.

With this powerful breakout above previous highs, the index is poised for continued upward momentum, potentially attracting increased institutional flows, he said.

He asked investors to capitalise on intra-day dips and accumulate fundamentally strong stocks in fertiliser, cement and banking sectors to benefit from the current upward trend.

Overall trading volumes increased to 710.6 million shares compared with Tuesday's tally of 578.2 million. The value of shares traded was Rs35.2 billion.

Shares of 475 companies were traded. Of these, 264 stocks closed higher, 170 fell and 41 remained unchanged.

Sui Southern Gas Company was the volume leader with trading in 51.6 million shares, rising Rs2.11 to close at Rs38.42. It was followed by Fauji Foods with 51.4 million shares, gaining Rs0.56 to close at Rs16.75 and K-Electric with 41.4 million shares, rising Rs0.09 to close at Rs5.41. Foreign investors sold shares worth Rs946 million, the National Clearing Company reported.