Stocks rally on robust results amid relevant political calm

Stocks jumped on Tuesday soaking up strength from consensus-beating financial results that gave sentiments a much-needed boost, amid bets on a positive FATF outcome and a thawing political situation, said dealers.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index gained 1.53 percent or 616.41 points to close at 40,956.58 points, while ready market volume increased to 492.674 million shares, compared with 319.563 million in the previous session. On the other hand, KSE-30 index, tracking the benchmark, gained 1.68 percent or 284.96 points to end at 17,281.78 points.

Tahir Abbas, director research at Arif Habib Limited said, “…the cyclical and some of the oil and exploration stocks performed better, while financial results were also above market expectations”.

However, investors were closely monitoring the ongoing political situation, while the outcome of the FATF meeting, scheduled for October 21-23, would guide the market in the following sessions, Abbas added.

As many as 416 scrips were active today, of which 305 advanced, 96 retreated, and 15 held the status quo.

Muhammad Saeed Khalid, head of research at Shajar Capital, said, “The market remained bullish during the day, mainly on the announcement of strong results amid hopes of Pakistan's de-listing from FATF's gray list in it upcoming meeting”.

“We have witnessed strong accumulation in GHNL, GHNI, PRL, and NRL where investors bought heavily in the respective scrips,” Khalid added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “Media reports that the government has done its best to meet FATF requirement and there is a strong likelihood of our coming out the gray list, sent positive signals down the market”.

Financial results also helped improved the sentiment, Ahmad added.

Saad Rafi, head of equity sales at Al Habib Capital Markets, said, “The market got support above 40,000 points’ level, which proved a positive portent for the index”.

Moreover, the anti-government protests were over and seemingly political temperature was coming down, which helped attract fresh investment, Rafi said, adding that flows improved on better financial results in several choice scrips.

“With political unrest losing steam and fears of a regime change fading away, the index seems positive in coming sessions, but few may wait for clarity on COVID-19 and FATF fronts before going long,” Rafi added.

Shahab Farooq, director research at Najam Capital, said, “Relative calm at the political arena and expectations of a positive outcome for Pakistan in FATF plenary session boosted sentiments futher”.

Lastly, results announcement towards the end of the session further supported the positive momentum, Farooq added.

Rafhan Maize, up Rs43.99 to close at Rs8,100/share, and Atlas Honda Limited, up Rs31.79 to finish at Rs466.79/share, were the top gainers of the day, while Unilever Foods, down Rs949.50 to close at Rs13,800/share, and Indus Dyeing, losing Rs39.88 to close at Rs510.12/share, took major hits.

Unity Foods Limited, up Rs0.54 to end at Rs19.54/share, posted highest volume with 77.967 million shares, whereas Lotte Chemical, up Rs0.47 to end at Rs12.76/share, recorded the lowest with 12.794 million shares.