Stocks jump near 3pc to 7-month high on easing ME conflict

KARACHI: Stocks on Thursday rallied by a massive three percent as investors went on a buying bash following easing US-Iran tensions, while improving macroeconomic situation also added to the cheer-factor, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index jumped a staggering 2.82 percent or 1165.50 points to close at 42,523.07 points, whereas KSE-30 strengthened 3.08 percent or 588.04 points to end at 19,659.38 points.

Ahsan Mehanti from Arif Habib Corporation said, “Stocks showed record recovery as investors weighed robust rally in global equities on easing geopolitical scene”.

“Investor interest remained upbeat amid SBP projections for subdued CPI inflation, current account deficit at 1.5-2 percent in FY20, FATF compliance, and stronger earnings outlook, amid higher local oil, auto, and fertiliser prices,” Mehanti added.

Of 381 active scrips, 325 were up, 44 dipped, and 12 did not change. Volumes swelled to 362.490 million shares, against 280.071 million on Wednesday.

Muzammil Aslam, a capital market expert, said “The market recorded significant improvement as conflict between the US and Iran appear to be moving towards, to some extent, making peace with each other”. “With the amended Army Act approved, and government’s decision barring NAB (National Accountability Bureau) from quizzing businessmen, and a calming political front, investor morale seems to have restored,” Muzammil added.

Samiullah Tariq, director research at Arif Habib Limited, said, “The mellow stance taken by the US President Donald Trump following attack from Iran helped improve the sentiment at the stock market”. “Ease in crude oil and gold prices since yesterday hints that soon situation has been defusing, allowing participants to take fresh positions,” Tariq added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Secuities, said, “The falling crude oil prices, clipping of 10 basis points in the yields of PIBs (Pakistan Investment Bonds) and oversold position changed the overall scenario and the market recorded hefty gains with good strong volumes in the choice scrips”.

Arif Habib Limited in their market analysis said, “Following President Trump’s address, most of the world stock markets performed well, as the concerns over war subsided”. “Oil prices, which tanked overnight due to dampening war prospects, also gained foothold above $60/bbl,

helping oil and gas chain to perform as well,” the brokerage added.

Topline Securities in a note said, “Index returned to its bull-run, which was halted by the emergence of US-Iran conflict”.

“US president made an announcement in which he highlighted that Iran is standing down and only announced economic sanctions on Iran instead of any military response,” Topline said in its report.

The highest gainers were Mari Petroleum, up Rs46.89 close at Rs1,351.45/share, and Service Industries Limited, up Rs27.46 to finish at Rs775.00/share. Top losers were Phillip Morris Pakistan, down Rs73.64 to close at Rs2,296.36/share, and Sapphire Fiber, down Rs45 to close at Rs855/share.

Bank of Punjab recorded the highest volumes with 53.074 million shares and gained Rs0.76 to end at Rs12.57/share. Avanceon Limited’s turnover was the lowest of the day at 6.206 million shares, whereas it strengthened by Rs1.94 to end at Rs40.96/share.