Stocks make modest gains amid monetary softening expectations

Stocks on Friday stayed buoyed on institutional cherry-picking amid expectations that the central bank’s monetary stance, especially after latest inflation data, might soften in upcoming policy meeting, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index was up 0.84 percent or 252.43 points to close at 30,467.20 points, whereas KSE-30 hit a high of 1.02 percent or 144.60 points to finish at 14,302.52 points.

Out of 300 active scrips, 156 ascended, 119 descended, and 25 remained inert amid a turnover of 48.205 million shares, compared to 146.537 million in the previous session.

Analyst Samiullah Tariq at Arif Habib said the market gained momentum following inflation numbers announced by the Pakistan Bureau of Statistics (PBS).

Consumer inflation edged up to 10.5 percent in August compared to 10.3 percent in July as the government tinkered with weights of different products in the measuring basket. PBS announced rebasing of the year to calculate consumer price index (CPI) inflation to 2015/16 from 2007/8.

Under the old method, consumer inflation for August stood at 11.63 percent from 10.3 percent in July. Rebasing of the year turned up July inflation at 8.4 percent.

Tariq said currently the share prices were extremely attractive as since January 2019 the market had lost nearly 19 percent and over 42 percent since reaching its peak in May 2017.

“A consolidation in economic numbers will restore the confidence of general investors further,” he said. Analyst Salman Ahmad at Aba Ali Habib said the market recovered on two grounds: institution buying, mostly focused into oil and gas stocks, trading at cheaper levels, and the buzz the interest rate has been peaked off, making a strong case for at least a hold, if not a slash.

Based on NCCPL data, foreigners remained net seller amounting to $5.45 million during the week. On the local’s side, mutual funds remained net seller of $3.11 million, while individual remained net buyers of $6.15 million.

“The turnover was bit low partly because all eyes were set on the outcome of FATF (Financial Action Task Force) meeting next week and partly owing to the fact that the market would remain shut on the first two days of the next week,” he added.

The PSX called off its second trading session to mark solidarity with the people of Indian-occupied Kashmir. The move to suspend trading on the bourse is part of Prime Minister Imran Khan’s strategy of attempting to harden international opinion against India, after New Delhi’s government revoked the restive province’s autonomy.

The highest gainers were Nestle Pakistan, up Rs108.75 close at Rs5899.00/share, and Colgate Palmolive Rs86.54 to finish at Rs1900.00/share. Companies that booked highest losses were Bhanero Textile, down Rs38.10 to close at Rs762.00/share, and Bata Pakistan, down Rs20.00 to close at Rs1200.00/share.

Maple Leaf was the most traded share with a turnover of 7.165 million shares to end at Rs17.23/share after losing Rs0.50.

The least traded stock was Unity Foods Limited, with a volume of 1.290 million shares, while it lost Rs0.03 to close at Rs8.34/share.