Stocks reverse six-week retreat to recover near 1.5pc on value-hunting

Stocks on Monday defeated an over a month long drag as investors could no longer resist the valuations that had become too tempting for them to let go in an oversold market, while promising macroeconomic numbers also catalysed some fresh buying commitments, dealers said.

Topline Securities, a brokerage, in its daily market review said investors broke their silence after losing 6.98 percent in six consecutive weeks, staging a huge recovery drawing strength from improved balance of payment data, where current account deficit for 8MFY19 plunged 22-23 percent year-on-year to $8.8 billion.

“Moreover, Finance Minister Asad Umar’s finally coming clean on IMF’s (International Monetary Fund) mission visit to Pakistan in the second half of April 2019 to finalise a possible bailout deal also gave investor morale some lift,” the brokerage house said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 1.42 percent or 545.00 points to close at 38,851.95 points level. KSE-30 shares index followed suit with a gain of 1.46 percent or 264.48 points to end at 18,415.67 points level.

Of 317 active scrips, 213 moved up, 87 retreated, and 17 remained unchanged. The ready market volumes stood at 99.535 million shares, as compared with the turnover of 129.470 billion shares in the previous session.

Ahsan Mehanti, an analyst at Arif Habib Corporation, said stocks recovered sharply as investor weighed $356 million upbeat data on current account deficit in February 2019, easing external account instability, and speculations over likely favourable negotiations for IMF bailout.

“Activity was led by oversold oil and banking scrips amid thin trade. Foreign inflows and higher global crude oil prices also contributed to a bullish close," Mehanti added. The benchmark index declined in the first half; however, it rallied in the final hours on the back of value hunting in banks.

An analyst said though there was nothing to cheer about, the only factor which pushed the market into the green column was the oversold conditions as the index in the last six weeks lost more than 2500 points, allowing some of the high net-worth individuals to build fresh positions.

Another factor that encouraged investors to buy shares was the assurance of the Jahanzeb Khan, chairman Federal Board of Revenue, that the authority won’t raid the business houses. Recently, several stock brokers were asked by the authorities to name the investors and other details to dig out more about the money trail.

The reports that Pakistan will soon receive up to $2 billion from China and $600 million from Asian Development Bank as likely financial assistance for budgetary support also added to the sentiment.

However, the market has been still in search of good positive development on the economic front to stabilise the sentiment at the stock market. The highest gainers were Bata Pakistan, up Rs52.84 to close at Rs1730.00/share, and Indus Motor Company, up Rs15.42 to finish at Rs1313.99/share.

Companies that booked highest losses were Colgate Palmolive, down Rs99.99 to close at Rs1900.00/share, and Phillip Morris Pakistan, down Rs69.00 to close at Rs3790.00/share. K-Electric Limited recorded the highest volumes with a turnover of 15.346 billion shares. The scrip gained Rs0.14 to close at Rs5.81/share. The lowest volumes were witnessed in Al-Ghazi Tractors Limited recording a turnover of Rs3300 shares, whereas the scrip lost Rs0.68 to end at Rs429.8/share.