Stocks surge as SBP leaves rate on hold
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The Pakistan Stock Exchange (PSX) reversed course on Monday following two days of profit-taking as the State Bank of Pakistan's monetary policy committee (MPC), in a widely anticipated move, left policy rate on hold at 11%.
Triggered by investor interest in selective stocks of banking, cement, fertiliser and energy sectors, the benchmark KSE-100 index closed higher by 944.82 points, or 0.61%, at 155,384.51.
The central bank kept the policy rate unchanged as inflationary pressure was feared to intensify following heavy rains and floods, which have damaged crops and livelihoods over vast swathes of the country. The State Bank's decision dispelled uncertainty and provided a boost to investor sentiment.
The market staged a comeback after dipping below 155,000 in the previous session. During Monday's trading, the KSE-100 touched the intra-day low of 154,486 before hitting the day's high at 155,602.
Talking to The Express Tribune, JS Global Head of Equity Research Waqas Ghani said that despite lingering concerns over fiscal pressures and external vulnerabilities, the steady monetary policy stance provided much-needed clarity to investors, which "helped set a constructive tone in the market."
KTrade Securities, in its market wrap, wrote that the PSX closed on a positive note as the benchmark index gained 945 points. The rally was driven by strong performances in Fauji Fertiliser Company, United Bank Ltd, Hub Power, TRG Pakistan, National Bank, DG Khan Cement and Maple Leaf Cement.
Market sentiment hinged on the monetary policy announcement, where the central bank left the policy rate unchanged at 11%, it said.
Trading activity remained robust as the PSX continued to demonstrate resilience, reflecting investor confidence in Pakistan's long-term economic trajectory. The optimism was supported by improved corporate earnings. However, some short-term consolidation is likely in the coming sessions as the market absorbs recent gains and prepares for futures contract rollover, KTrade added.
Arif Habib Limited (AHL) observed that the stock market found support after recent declines, with buyers returning following the MPC decision that pushed the index up 0.61% day-on-day.
Some 57 shares rose while 40 fell, where Fauji Fertiliser (+2.06%), United Bank (+0.87%) and Hub Power (+1.52%) contributed the most to the index gains. In contrast, Habib Bank (-0.85%), Bank AL Habib (-0.5%) and TPL REIT Fund-I (-3.76%) were the biggest drags, it said.
AHL mentioned that the SBP kept its key rate unchanged at 11% for a third straight policy meeting, signalling caution as floods were adding to risks. The torrential monsoon rains have killed more than 900 people, displaced 4.2 million and destroyed farmland over vast areas. Planning Minister Ahsan Iqbal has estimated the losses at around Rs500 billion. Among corporate news, Millat Tractors (-1.02%) posted earnings per share of Rs31.94, down 38% year-on-year, and dividend per share of Rs60, it added.
Topline Securities, in its market review, said that the KSE-100 index closed on a strong note, registering an impressive gain of 945 points. Bullish sentiment prevailed throughout the day, with the index touching the intra-day high of 155,602, following the State Bank's decision to maintain the policy rate at 11%.
Robust performances from Fauji Fertiliser, UBL and Hubco contributed 448 points to the index's advance. Overall trading volumes dropped to 857.6 million shares versus previous tally of 987.6 million. Total traded value came in at Rs32.7 billion.
Shares of 482 companies were traded. Of these, 243 stocks closed higher, 205 dropped and 34 remained unchanged.
Pace Pakistan was the volume leader with trading in 77.8 million shares, rising Rs1 to close at Rs8.47. It was followed by The Bank of Punjab with 58.2 million shares, climbing Rs0.76 to close at Rs18.57 and Pakistan International Bulk Terminal with 53.4 million shares, losing Rs0.05 to close at Rs12.41. Foreign investors sold shares worth Rs1.3 billion, the National Clearing Company reported.