Stocks climbed to a near-record high on Wednesday, boosted by strong corporate earnings, easing inflation, and optimism over the country’s economic prospects, dealers said.
The market remained in a bullish trend for the third consecutive day and since the start of the current trading week, stimulated by positive developments that attracted investors, they added.
The Pakistan Stock Exchange (PSX)’s benchmark KSE-100 index gained 422.37 points, or 0.81 percent, to close at 52,342.64, inching closer to its all-time high. index has gained 11 percent this year, making it one of the best performers in Asia.
Dealers said a technical correction is due, however, as the market is overbought after continuous bullish sessions in the current week. The rally was driven by a broad-based buying spree across sectors, with power, banking, cement, textile, and oil and gas exploration companies leading the gains. Hub Power Co., Pakistan Oilfields Ltd., International Industries Ltd., Habib Bank Ltd., and Systems Ltd. were among the top contributors to the index.
Investors were encouraged by the latest inflation data, which showed that consumer prices rose 26.9 percent in October from a year earlier, down from 28.4% in September. The decline was mainly due to lower fuel prices and a crackdown on currency hoarders by the authorities.
The lower inflation also raised hopes that the central bank may cut interest rates in its next monetary policy meeting. The State Bank of Pakistan kept its policy rate unchanged at 22% in its last meeting, held on Monday.
“Stocks are reaching all-time highs amid higher trades as investors weigh strong earnings, government deliberations on SIFC initiatives, and CPEC projects,” said Ahsan Mehanti, an analyst at Arif Habib Corp.
He said that the CPI inflation falling to 26.9 percent in October 2023, reports of Shell Pakistan’s takeover by Saudi WAFI energy OMC, and the likely release of the next IMF tranche under the $3 billion SBA played a catalytic role in the bullish close.
The index remained positive throughout the day, showing an intraday high of 52,451.21 (+530.93) and a low of 52,075.16 (+154.89) points.
The total volume of the KSE-100 Index was 258.24 million shares. Of the 100 index companies, 63 closed up, 24 closed down, while 13 remained untraded.
The KSE-100 index was supported by Power Generation & Distribution (+75.69 points), Commercial Banks (+59.37 points), Cement (+52.73 points), Textile Composite (+51.15 points), and Oil & Gas Exploration Companies (+45.37 points).
Companies adding points to the index were HUBC (+78.48 points), POL (+33.25 points), ILP (+31.07 points), HBL (+29.8 points), and SYS (+23.1 points).
Analyst Ali Najib at Topline Securities said that it was another bullish day at Pakistan Equities. "The day began with strong momentum as the market remained positive throughout the trading hours and settled 0.81 percent up."
He added that this momentum could be attributed to crucial talks with the International Monetary Fund (IMF) scheduled to begin tomorrow for the second review of the Fund’s Stand-By Arrangement (SBA), which could lead to the release of a $700 million tranche.
Arif Habib Limited said that the march to new highs continues as October inflation fell following a sharp decrease in fuel prices and a crackdown on currency hoarders bore fruits.
The All-Share index closed at 34,819.38 with a net gain of 261.16 points. Total market volume was 526.463 million shares, compared to 455.332 from the previous session, while traded value was recorded at Rs16.51 billion, showing an increase of Rs0.87 billion. There were 210,945 trades reported in 353 companies, with 216 closing up, 119 closing down, and 18 remaining unchanged.
