The capital market on Tuesday recorded healthy gains over talks that the government backed financial institutions will likely pump the much needed liquidity into the sagging market, dealers said.
Analyst Ahsan Mehanti from Arif Habib Corporations said, “Bullish activity was witnessed at the PSX led by selected scrips across the board, as investor weighed activity by state funds following finance ministry approval on Disaster Support Fund for PSX.”
SBP policy rate hike by 150bps to 12.25 percent, dismal data on fiscal deficit for July-March 2019 widening to five percent, and plunge in rupee parity against dollar invited early session pressure. Higher Public Sector Development Programme commitment in federal budget FY19 and surge in global crude oil prices played a catalytic role in the bullish close, Mehanti added.
Pakistan Stock Exchange (PSX) KSE-100 shares index gained 0.58 percent or 191.56 points to close at 33,442.10 points level. KSE-30 shares index followed suit with a high of 0.82 percent or 128.49 points to end at 15,881.02 points level.
Of 327 active scrips, 193 moved up, 115 retreated, and 19 remained unchanged. The ready market volumes stood at 153.526 million shares, as compared with the turnover of 165.485 million shares in the previous session.
Madiha Javed, head of research at Ismail Iqbal Securities said, “Benchmark KSE-100 index opened on a negative note, touching intraday low of 32,852 points (-1.76 percent) as a result of 150bps hike in interest rate, which was higher than market consensus of 100bps.”
However, the market managed to recover after reported interest from institutional investors and speculations over a meeting of cement players scheduled for Wednesday. Exploration and production companies, oil marketing companies, and cements were major contributors to the index gains.
Total traded volume remained lower than yesterday with 153 million shares compared to 165 million shares traded in Monday’s session, she added.
The share market at the start of the trading session was under a bearish spell, owing to steep rise in benchmark interest rate by 1.50 percent. However, several dealers and traders explained that the rise in the interest rate was already priced in and needed some fresh investment from mutual funds and foreign investors.
Salman Ahmad, head of institutional sales at Aba Ali Habib said, “Devaluation has forced several investors to adopt wait and see approach once the rate of Pakistan rupee settle and stability prevail than the market to show some strides.”
Market sentiments improved appreciably on the report that financial institutions and state run companies were now accumulating funds to buy stocks to boost stock price in coming sessions, Salman added.
The highest gainers were Island Textile, up Rs48.39 to close at Rs2,139.99/share, and Mari Petroleum, up Rs33.37 to finish at Rs984.79/share.
Companies that booked highest losses were Nestle Pakistan, down Rs159.15 to close at Rs7,038.85/share, and Bata Pakistan, down Rs54.50 to close at Rs1,227.50/share.
Unity Foods Limited recorded the highest volumes with a turnover of 19.486 billion shares. The scrip gained Rs0.87 to close at Rs10.12/share.
The lowest volumes were witnessed in Bank Al-Falah, recording a turnover of 3.727 million shares, whereas the scrip gained Rs0.88 to end at Rs45.68/share.