Stocks gain as trade gap shrinks, tech sector shines

Stocks rose on Monday as the trade deficit narrowed to a six-month low in September, boosting investor sentiment ahead of a key IMF review later this month, dealers said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index gained 394.49 points or 0.85 percent to close at 46,627.08 points. The highest index of the day remained at 46,704.64 points while the lowest level was recorded at 46,294.62 points.

“Stocks closed bullish amid upbeat data on $1.5 billion trade deficit falling by 48.2 percent in September ahead of IMF review meetings this month to release next support tranche and upbeat growth outlook,” said analyst Ahsan Mehanti at Arif Habib Corp.

"An upbeat data on crops’ output, cotton production, power generation, fertilizers, autos, POL and cement sales in September, strong rupee recovery and govt deliberations on privatisation of SOEs played a catalytic role in bullish activity."

The KSE-30 index also gained by 160.11 points or 1.00 percent to close at 16,149.32 points. Traded shares rose by 25 million shares to 202.598 million shares from 177.617 million shares. The trading value increased to Rs7.404 billion from Rs6.932 billion. Market capital expanded to Rs6.932 trillion against Rs6.885 trillion. Out of 330 companies active in the session, 166 closed in green, 144 in red and 20 remained unchanged.

Analyst Ali Najib at Topline Securities said equities had a positive day in terms of both market momentum and volumes. "The KSE benchmark index commenced the week on a positive note, remained green throughout the trading hours," Najib said.

"The aforesaid rally can likely be attributed to rejuvenated buying interest in the technology sector where Systems Ltd was the darling stock due to its attractive price level of Rs395-396. It gained Rs15.97; up 4.06 percent."

In addition, ENGRO Corp’s recent announcement regarding in-principle understanding with a potential acquirer for the divestment of selective assets of thermal energy brought the stock onto investors’ radar.

Further, anticipated gas price hikes to fulfil IMF conditions and a decline in international oil prices kept the E&P & OMC sectors in the limelight during the trading session.

Resultantly, SYS, ENGRO, OGDC, POL & PPL added 245 points, cumulatively. On the flip side, BAFL, HBL & FFC lost 31 points as they saw some profit taking in them.

The highest increase was recorded in Ismail Ind, which rose by Rs48.75 to Rs698.75 per share, followed by Pak Hotels, which increased by Rs19.28 to Rs276.32 per share. A significant decline was noted in Al-Abbas Sugar, which fell by Rs33.84 to Rs510.11 per share, followed by Abbott Lab., which decreased by Rs9.49 to Rs336.01 per share.

Brokerage Arif Habib Ltd said the first trading session of Q4CY23 demonstrated a solid start as the market continued the upward trend that had been hinted at throughout the previous week, expanding further away from the critical support level at 46,000 points level.

"The market maintains its trajectory to test the 46,900 level this week and potentially surpass the 47,000 mark," it added. Crucially, support remains steadfast at 46,000, underscoring the market's preparations to challenge the August highs."

WorldCall Telecom remained the volume leader with 44.891 million shares which closed higher by 10 paisas to Rs1.24 per share. It was followed by Cnergyico PK with 17.096 million shares, which closed higher by 9 paisas to Rs3.13 per share.

Other significant turnover stocks included Oil & Gas Dev., Pak Petroleum, Prud Mod. 1st, Bankislami Pak., Sui North Gas, Nishat ChunPow, Pak Refinery and Maple Leaf. Shares’ turnover in the future contracts decreased to 61.855 million shares from 249.066 million shares.