Stocks, which traded lacklustre for long amid political noise, are expected to find a new support as the Supreme Court’s decision in Panamagate case has largely cleared out the fog that had been building up for more than a year, dealers said.
The dealers said immediate triggers include result season, which will bring specific shares in the limelight.
Pakistan Stock Exchange (PSX) traded lacklustre and volatile during the week ended July 28, but managed to close 1.36 percent up as the investors took positions in oversold market on the back of corporate earnings. Analyst Faizan Ahmed at JS Global said the market nosedived more than 1,600 points during the first half of Friday ahead of the Supreme Court’s decision regarding the disqualification of Nawaz Sharif from the post of prime minister after witnessing a rebound in the first four sessions of the week with 611 points gains.
“However, the market sharply recovered to close 0.01 percent up after the Supreme Court announced the disqualification of the PM Nawaz Sharif as value hunters saw it an end to longstanding uncertainty,” Ahmed said. The KSE 100-share Index gained 1.36 percent or 617.64 points to close the week at 45,912.36 points. KSE 30-share Index was up 0.9 percent or 214.41 points to end at 23,854 points. Average trading volume up 48 percent to 198 million shares/day from 135 million shares last week. Activity was focused in retail favourite stocks, including Azgard Nine, TRG Pakistan, Bank of Punjab, Sui Southern Gas and Engro Polymer.
“Though slight volatility was observed by mid-week and the benchmark KSE-100 index zigzagged amid speculation over the high-level panama case, yet it managed to remain steady,” Arif Habib Limited said in a report. Foreigners and mutual funds were the net sellers during the week offloading equities worth $13.16 million and $28.2 million, respectively, while individuals were the net buyers accumulating shares worth $23.7 million. Elixir Securities, in a report, said the market witnessed an important trading session on Friday when a much-awaited Panama case verdict was finally announced.
“Intra-day volatility backed by heavy volume indicated participants’ positive sentiment of a possible culmination of political uncertainty, which clogged local market for the last few months,” added the brokerage.
During the outgoing week, oil stocks rallied the most tracking international oil prices, which rose 4.5 percent with OGDC, PPL and POL pulling the index up by a cumulative 154 points. Nestle and Hub Power contributed further 228.2 points. On the flip side, Lucky Cement, HBL, UBL, MCB and Pak Suzuki cumulatively dragged the benchmark index by 270 points. Positive performance was also posted by export- oriented stocks that stand to gain from potential depreciation in rupee.