Stocks close higher on earnings optimism, banks lead

Stocks closed higher on Wednesday, boosted by hopes for better earnings outlook ahead, especially in the banking sector, traders said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index gained by 323.03 points or 0.69 percent to close at 47,079.83 points. The highest index of the day remained at 47,199.50 points while the lowest level was recorded at 46,748.79 points.

“Stocks closed higher in the earnings season rally at PSX on strong earnings outlook,” said Ahsan Mehanti, an analyst at Arif Habib Corp. "Reports on surging cement exports, ongoing strong rupee recovery and likely easing of monetary policy on expected lower inflation played a catalytic role in bullish activity."

The KSE-30 index also increased by 143.08 points or 0.88 percent to close at 16,344.74 points. Traded shares rose by 117 million shares to 330.249 million shares from 213.188 million shares. The trading value increased to Rs7.304 billion from Rs6.094 billion. Market capital expanded to Rs6.977 trillion against Rs6.945 trillion. Out of 342 companies active in the session, 172 closed in green, 134 in red and 36 remained unchanged.

Analyst Ali Najib at Topline Securities said equities had a positive day, with the benchmark index gained 323 points. "Investors chose to reinforce their positions in the banking sector stocks in anticipation of upcoming results, set to commence next week. So, they bought blue-chip stocks which are available at attractive levels offering decent dividend yield," Najib said.

As a result of this market activity, HBL, MCB, UBL, EFERT, and COLG collectively contributed 287 points to the index. On the other hand, SYS, PPL, and ENGRO experienced some profit-taking, resulting in a loss of 44 points.

The highest increase was recorded in Colgate Palm XD, which rose by Rs45 to Rs1,413.21 per share, followed by Mehmood Tex., which increased by Rs23.63 to Rs541.63 per share. A significant decline was noted in Bata (Pak), which fell by Rs24 to Rs1,675 per share, followed by Premier Suger, which decreased by Rs21.37 to Rs500 per share.

Brokerage Arif Habib Ltd said the PSX witnessed a significant breakthrough as the benchmark index surged, achieving the remarkable milestone of 47,000 points.

"Blue-chip banks played a pivotal role in driving the market's advance, with HBL leading the way with an impressive gain of 5.69 percent," it added. "MCB Bank also contributed significantly with a gain of 4.37 percent, and United Bank Limited followed suit, adding 2.28 percent to the rally."

Airlink Communications Limited PA was another standout performer, posting a substantial gain of 7.1 percent. This surge came on the heels of the company's announcement of a dividend per share of Rs2.5 and its FY23 earnings report.

It is expected that the recent uptrend will gather momentum as the index sets its sights on revisiting the highs recorded in August.

WorldCall Telecom remained the volume leader with 150.526 million shares which closed higher by 14 paisas to Rs1.39 per share. It was followed by Pak Refinery with 12.978 million shares, which closed higher by 30 paisas to Rs15.89 per share.

Other significant turnover stocks included Bankislami Pak., Cnergyico PK, Habib Bank, P.IA.C. (A), Maple Leaf Air Link Commun, Al-Shaheer Corp and Oil & Gas Dev. Shares’ turnover in the future contracts increased to 73.776 million shares from 64.698 million shares.