Stocks climbed up for the third consecutive session with significant support arriving from mutual funds and banks on the back of steep decline in National Savings Schemes (NSS) rates announced by the government, , dealers said.
Salman Ahmad, head of institutional sales at Aba Ali Habib said, “The market recorded improvement and maintained the winning streak with decline in NSS rates by almost 200 basis points, which hints that now these papers might see some selling and investment would be diverted to the capital market.”
Before the end, the market saw some downward movement, as a few believed that it has entered the overbought cycle and needed some correction. With fundamentals having been quite strong, the market with some more economic developments was likely to climb sharply, Salman added.
Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.83 percent or 295.02 points to close at 35,653.33 points level. KSE-30 shares index followed suit with a high of 0.48 percent or 79.89 points to end at 16,606.48 points level.
Of 379 active scrips, 248 moved up, 115 retreated, and 16 remained unchanged. The ready market volumes stood at 298.062 million shares, as compared with the turnover of 308.484 million shares in the previous session.
Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks closed higher as investors weigh government decision over slash in National Savings Schemes (NSS) rates which is likely to boost equities at the capital market.”
Upbeat quarterly financial results in the energy sector, subsiding fears over political protests, surging global equities, and higher oil prices played a catalytic role in the bullish close, he added.
Selling surfaced before the closure on account of some correction and reports of higher inflation rate. The inflation number hit 11 percent against the market expectation of 10.20 to 10.50 percent.
The arrival of these numbers slightly hit positive sentiments on account of interest rate cut, since inflation remains on the higher side, a leading trader said.
Topline Securities in their market round-up said, “Investor participation in terms of volume was recorded at 298 million shares, down by three percent while traded value was up by 21 percent as compared to previous session.”
WorldCall Telecom remained the market leader followed by Fauji Cement Company Limited and K-Electric which cumulatively added 31 million shares to the total volume, the brokerage house added.
Arif Habib Limited in their daily market analysis stated, “Buying activity was evident across the board, on the back of reduction in NSS rates.” That gave confidence to investors for further accumulation, despite index already registering a significant surge, the report added.
The highest gainers were Nestle Pakistan, up Rs314.00 to close at Rs6,779.00/share, and Pakistan Tobacco, up Rs110.98 to finish at Rs2,393.00/share. Companies that booked highest losses were Phillip Morris Pakistan, down Rs110.28 to close at Rs2,580.00/share, and Island Textile, down Rs71.58 to close at Rs1,584.33/share.
WorldCall Telecom recorded the highest volumes with a turnover of 15.795 billion shares. The scrip gained Re0.01 to end at Rs1.49/share.
The lowest volumes were witnessed in TRG Pakistan Limited, recording a turnover of 7.213 million shares, whereas the scrip gained Re0.42 to end at Rs17.94/share.
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