Bulls on Tuesday made a mighty comeback at the Pakistan Stock Exchange (PSX), as the benchmark KSE-100 index shattered a three-day losing streak and drove past the 46,000-point level.
Investor confidence got a boost owing to a number of positive developments comprising of payments to independent power producers (IPPs), which improved investment in stocks of the power sector.
The decision of maintaining the current petroleum product prices along with the assurance of political stability provided by the government’s coalition partners as well as the fresh appreciation of the Pakistani rupee against the USD implanted optimism among market participants.
Moreover, speculation regarding the positive conclusion of the ongoing negotiations between the International Monetary Fund (IMF) and the government invigorated investors, who chose to cherry-pick stocks across the board.
Trading commenced with a spike and the benchmark index rallied, largely led by power sector stocks, owing to positive development pertaining to the IPPs. The index mounted at a steady pace throughout the day and the uptrend fast-tracked towards the closing.
Towards closing the benchmark KSE-100 index recorded an upsurge of 806.65 points, or 1.76%, to settle at 46,542.91.
Arif Habib Limited, issued a report, stating that the bullish momentum occurred following the opening bell in the market, mostly led by the power sector, as the Economic Coordination Committee (ECC) of the cabinet greenlighted a payment of Rs134.783 billion to the IPPs as a second induction (60%) in adherence to the payment mechanism.
Appreciation of the rupee against the greenback and the prime minister’s decision to halt price increases for petroleum products till November 30 provided confidence to the investors.
As per data gathered by the National Clearing Company of Pakistan, foreign institutional investors were net sellers of Rs586.28 million worth of shares during the trading session.
As per the report, the stocks with a major contribution to the bull run are the Cement and exploration and production stocks.
During the last trading hour, the technology sector made a positive contribution with TRG Pakistan hitting its upper circuit owing to talk of buyback of shares.
On the institutional front, buying activity was witnessed across the board by the mutual funds.
Sectors with positive performance included cement (+189 points), technology (121 points), exploration and production (104 points), power (+78 points), and banks (63 points).
Overall trading volumes rose to 243.2 million shares compared to Monday’s tally of 172.9 million. The value of shares traded during the day amounted to Rs10.4 billion.
Shares of 351 companies were traded. Towards the end of the day, 239 stocks closed higher, 89 declined and 23 remained unchanged.
Ghani Global Holdings led the volume chart with 16.6 million shares, losing Rs0.42 to close at Rs33.73. TPL Properties XB followed with 15.2 million shares, gaining Rs3.28 to close at Rs51.95 while Waves Singer with 11 million shares, gaining Rs1.32 closed at Rs19.62.