Stocks rise sharply as inflation eases

Investors resorted to robust buying of attractive shares at the Pakistan Stock Exchange (PSX) on Monday as the benchmark KSE-100 index soared around 1,350 points and closed just a few points short of the 150,000 mark.

The market exhibited a sustained momentum throughout the session, during which the index climbed to the intra-day peak of 150,066 points. By the end of trading, the KSE-100 settled at 149,971.12, up a handsome 1,353.34 points, or 0.91%.

The rally reflects optimism among market participants, triggered by deep interest in sectors such as cement and exploration & production. Revealing inflation statistics, the Pakistan Bureau of Statistics (PBS) reported that the Consumer Price Index (CPI) fell from 4.1% in July to 3% in August, driven by lower food and electricity prices.

Arif Habib Limited (AHL) commented in its report that a strong follow-through rally, continuing Friday's sharp momentum, propelled the KSE-100 index back towards the 150,000 level.

Some 67 shares rose while 32 fell, where the major positive contribution came from Lucky Cement (+4.24%), Oil and Gas Development Company (+2.27%) and Fauji Cement (+7.39%). On the flip side, Fauji Fertiliser Company (-0.63%), Systems Limited (-1.77%) and Pakgen Power (-6.33%) were the biggest index drags, said AHL.

Among corporate news, Sazgar Engineering released its FY25 results, where the company declared earnings per share of Rs131.29, up 106% year-on-year (YoY), and dividend per share of Rs52. For 4QFY25, the EPS remained steady at Rs57.60 while the company announced a payout of Rs20.

AHL pointed out that the monthly CPI-based inflation eased in August, though torrential rains disrupted supply chains and pushed up prices. The CPI recorded a rise of 3% YoY compared to 4.1% in July. The brokerage anticipated that gains in the KSE-100 index would continue towards the weekly draw at 151.2k.

In its market wrap, KTrade Securities wrote that the PSX experienced a reversal of trend as the KSE-100 gained 1,353 points to 149,971, after briefly hitting the intra-day low of 148,500. The market witnessed significant buying in banking and cement sectors, driven by a positive outlook for both. The Bank of Punjab and Pak Elektron hit their upper limits while the oil and gas sector registered a modest uptick. Meanwhile, fertiliser stocks continued to show weakness due to a negative outlook on the agriculture sector, KTrade said.

Topline Securities said in its review that bulls returned with full force and kept a firm footing throughout the day. The benchmark index surged to the intra-day high of 1,448 points before settling at 149,971, up 1,353 points.

Sentiment turned upbeat as the August CPI came in at 3% compared to 4.1% in the previous month, which was well below market expectations, fuelling buying momentum across different sectors.

Investor appetite was particularly strong in the cement category, where heavyweights such as Fauji Cement, Lucky Cement, Cherat Cement, Maple Leaf Cement and DG Khan Cement closed higher on expectations of improved sales, said Topline.

Overall trading volumes decreased to 1.2 billion shares compared with previous session's tally of 1.3 billion. Traded value stood at Rs48.8 billion. Shares of 480 companies were traded. Of these, 272 rose, 175 fell and 33 remained unchanged.

The Bank of Punjab was the volume leader with trading in 97.7 million shares, gaining Rs1.51 to close at Rs16.58. It was followed by K-Electric with 86 million shares, rising Rs0.11 to close at Rs5.43 and Pervez Ahmed Consultancy with 54.5 million shares, adding Rs0.19 to close at Rs3.04. Foreign investors sold shares worth Rs431 million, the National Clearing Company reported.