Stocks on Wednesday broke free from a multiple-session-long bear-hug, gaining near one percent, led by the lure of irresistible valuations as well as stronger-than-expected earnings, especially in the banking sector, dealers said.
Analyst Ahsan Mehanti from Arif Habib Corporation said oversold oil and banking scrips fueled the bull-run as investors weighed United Nations and Chinese offers for mediation to ease off Pakistan-India tensions.
Mid-session pressure remained in cement stocks amid order cancellations and raise in custom duty on Pakistan imports in India, Mehanti said, adding support remained in pharmaceutical sector on likely imposition of 200 percent Regulatory Duty on Indian imports coming into Pakistan.
Higher global crude oil prices, foreign inflows and strong financial results in oil sector led to a bullish close, he said.
Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.81 percent or 322.31 points to close at 40,279.38 points, whereas KSE-30 shares index followed suit with a high of 1.24 percent or 237.63 points to end at 19,454.34 points.
Of 337 active scrips, 141 moved up, 165 retreated, and 31 remained unchanged.
The ready market volumes stood at 132.089 million shares against 94.392 million shares in the previous session. Madiha Javed, head of research at Ismail Iqbal Securities, said the market opened on a negative note but the trend reversed as the session progressed towards midday.
Investors were buoyed by the corporate results with a few large caps reporting their financials happenings.
Banking sector got a leg up from United Bank Limited, whose earnings beat expectations, while earnings reports of Mari Petroleum and Engro also gave a push to the market.
According to a leading analyst, initial trading showed weakness following the arrival of the fiscal numbers for the six months ended December 31, 2018, which showed fiscal deficit amounted to 2.7 percent of the national gross domestic product (GDP). These numbers revealed that the ground realities have not yet changed as claimed by the government and the deficit was likely to balloon beyond 6.6 percent of the GDP by the year-end, the analyst added.
However, the rally triggered before the close of the market following announcement of financial results of some the key and leading companies which helped turn the tables.
Moreover, some are also betting on the upcoming results to further improve the sentiment.
The one positive portent for the market was that it has been getting a support below 40000 points level, which hints that following some big positive development a fresh positive rally is likely to ensue.
The highest gainers were Colgate Palmolive, up Rs50.00 to close at Rs2050.00/share, and Mari Petroleum, up Rs27.48 to finish at Rs1301.75/share. Companies that booked highest losses were Wyeth Pakistan Limited, down Rs22.67 to close at Rs1104.33/share, and ICI Pakistan, down Rs22.42 to close at Rs695.42/share.
Bank of Punjab recorded the highest volumes with a turnover of 7.558 million shares. The bank’s scrip gained Rs0.28 to close at Rs13.59/share.
The lowest volumes were witnessed in Pakistan International Bulk recording a turnover of 17.825 billion shares, whereas the scrip lost Rs0.77 to end at Rs11.27/share.