Stocks burst out of five-day rout, betting on geopolitical thaw

Stocks on Thursday burst out from a five session rout to gain near a percent as the spectre of another war that was looming large over South Asia seems to have started fading away following a geopolitical thaw, dealers said.

Topline Securities, a brokerage, in its daily market report said it was mainly on the back of some positive development on Pakistan-India conflict.

“This included US President Donald Trump’s statement that he has received ‘reasonably attractive news from Pakistan and India’ about the ongoing conflict,” Topline said.

Prime Minister Imran Khan’s announcement to release captured Indian air force pilot Abhinandan Varthman as a peace gesture also rallied robust support for Pakistan from around the world, the brokerage said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.94 percent or 361.92 points to close at 39,054.61 points, whereas KSE-30 shares index followed suit with a high of 0.61 percent or 114.72 points to end at 18,777.18 points.

Of 364 active scrips, 256 moved up, 84 retreated, and 24 remained unchanged. The ready market volumes stood at 159.385 million shares, compared to 273.685 million shares in the previous session.

Madiha Javed, head of research at Ismail Iqbal Securities, said the market recovered after US President’s intervention in Pakistan-India conflict; however volumes were down from yesterday.

“Overall banking sector contributed the most to the index gains,” Madiha added. Analyst Ahsan Mehanti from Arif Habib Corporations said stocks showed recovery as investor weighed likely resolution of Pak-India conflict after Pakistan offered peace talks.

“Higher global crude oil prices and likely ease in geopolitical tension helped catalyse a bullish close,” Mehanti added.

Adil Ghaffar, CEO First Equity Modaraba, said stock market suffered more due to unavailability of required depth, whereas other factors such as foreign exchange and oil reserves also played negatively. During the session, the index increased 456 points; however, later the investors showed concern due to tensions on the border, which resulted in a decline of 134 points.

The market recovered in the last trading hours that resulted in an adjusted closing with a gain of 362 points. Though volumes declined, compared to yesterday, healthy volumes were seen in the end. Banking sector led the volumes table with 24 million shares, topped by Bank of Punjab (BOP).

Prime Minister Khan, while addressing the Joint session of Parliament once again offered dialogue to India.

Topline Securities said for the month of February 2019, the benchmark Index wiped out half of its gains, losing 4.3 percent month-on-month (or 1,745 points).

“Investors resorted to selling during the month due to poor corporate earnings,” the brokerage said.

The top gainers were Bata Pakistan, up Rs68.00 to close at Rs1599.00/share, and Pakistan Tobacco, up Rs65.92 to finish at Rs2582.20/share.

The top losers were Nestle Pakistan, down Rs300.00 to close at Rs8200.00/share, and Indus Dyeing down Rs25.00 to close at Rs475.00/share. The BOP recorded the highest volumes with a turnover of 13.369 billion shares. The bank’s scrip gained Rs0.45 to close at Rs12.69/share. The lowest volumes were witnessed in Bank Al-Habib recording a turnover of 4.220 billion shares, whereas the bank’s scrip lost Rs0.02 to end at Rs84.01/share.