Stocks pick up on promising macroeconomic data

Stocks on Friday got off their flattish course to gain near a percent as comparatively up-trending macroeconomic numbers gave sentiments a vitalising shot in the arm, spurring buying activities across the board, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index was up 340.69 points (0.91 percent) to close at 37,583.89 points, while the KSE-30 index settled with a gain of just 25.91 points (0.15 percent) to end at 17,340.53 points.

Ahsan Mehanti from Arif Habib Corporation, said, “Today’s bullish close was led by scrips across the board as investors weighed upbeat data on trade deficit, falling by 34 percent to $7.77 billion and record foreign investment of $713 million in T-bills during July-October 2019”.

Stocks were underpinned by easing political uncertainty, surging exports data, and foreign inflows, Mehanti added. Of 400 active scrips, 296 ended higher, 94 lower, and 10 were unchanged. Volumes swelled to 369.03 million shares, higher as compared to 336.365 million shares in the previous session.

Samiullah Tariq, director research at Arif Habib Limited, said, “The market continued its upward journey taking queue from the portfolio investment, surfacing in treasury bills and Pakistan Investment Bonds, which also propelled positive sentiment at the equity market”.

Tariq said Prime Minister Imran Khan in his speech at the inauguration of wind power projects hinted that foreign direct investment had started cruising into Pakistan, which was good omen for the country as well as economy.

Faisal Shaji, strategist at Standard Capital, said the buoyant mood was in control at the market and KSE-100 was flying in terms of index and brokerage volumes.

“Investors’ participation increased at a time when the market is extremely overbought and it appears to have completed its first or second bullish wave,” Shaji added.

He went on to say that though the sentiment was bullish, the market was still heavier and could take breather for the time being.

Shaji attributed this upsurge to buoyant trade data, wherein trade deficit for first four months decreased by 34 percent compared to the same period last year.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said “The inquiries from the buyers have increased sharply and active buying from mutual funds has boosted the overall sentiment”.

“With Price to Earnings ratio reaching attractive levels amid a downtrend witnessed in some of the debt instrument, equities became attractive for investors.”

Sentiment got ample support from the key economic indicators such as a rise in exports, shrinking trade deficit, and exchange rate stability, and foreign exchange reserves above $15 billion, Ahmad added.

Colgate Palmolive, up Rs91.25 close at Rs1916.25/share, and Phillip Morris Pakistan, up Rs59.40 to finish at Rs2250.00/share emerged as the highest gainers.

On the other hand, Island Textile, down Rs74 to close at Rs1,420/share, and Bata Pakistan, down Rs52.20 to close at Rs1831.70/share, turned out to be the top losers of the day.

Bank of Punjab posted the highest volumes with 36.247 million shares, gaining Rs0.49 to end at Rs10.87/share, while Pakistan Elektron’s turnover was the lowest with 8.397 million shares; however, the scrip gained Rs1.06 to end at Rs22.42/share.