Stocks surge amid easing political fears

Stocks on Monday crossed 43,000 points after almost 11 months, drawing strength from an apparently weakening anti-government protest movement, with cyclical sectors hitting the limelight after posting double-digit sales growth, hinting at a recovering economy, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index gained 1.87 percent or 795.82 points to close at 43,266.22 points, while volumes swelled to 629.525 million shares, as compared with 557.610 million in the previous session. KSE-30 followed the suit with a high of 2.02 percent or 358.52 points to end at 18,088.67 points.

Tahir Abbas, director research at Arif Habib Limited, said the market surged after some clarity on the political front eased investor concerns as last week the opposition lawmakers seemed adamant on tendering resignations in a bid to mount pressure on the government.

Moreover, the latest manufacturing data, coupled with rising remittances, hinted an economic revival was in the making, which improved over sentiments, he said. Of 413 active scrips, 320 improved, 76 lost, and 17 remained unchanged.

Faisal Shaji Strategist at Standard Capital, said, the benchmark index crossed 43,000 smoothly, whille investors heaved a sigh of relief after a weak political show put up by opposition parties pointed towards the government strength.

“We see a good December,” Shaji added. Muhammad Saeed Khalid, head of research at Shajar Capital, said stocks remained robust during the session, marking an intra-day high of 846 points to close at 43,316 points.

Investors remained bullish mainly on the recovering economic sentiments along with the vaccine hopes for pharmaceutical sector, Abbas said, adding that investors mainly accumulated in the tech, refinery, and automobile sectors, “where we noticed aggressive buying sentiments”.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said after many months the index saw 43,000 points’ mark, mainly after opposition’s much-touted public rally in Lahore failed to make an impact, dropping clues the anti-government movement was fizzling out fast.

Only the political noise was keeping the investors at bay as the inherent sentiment was quite strong because of rising remittance, exports, and foreign exchange reserves. The sector-wise trend was also positive as steel, auto, and cement sales recorded encouraging growth suggesting economy was somewhat out of the woods, Ahmad added.

A A Soomro, managing director at KASB Securities, said, “The post-COVID high levels are attributed to a weakening opposition tone at PDM (Pakistan Democratic Movement) rally, China's increase in swap loans to enable repay $1 billion to Saudi Arabia, and fall in daily COVID cases.

“We expect the uptick to continue this week as cases seem to be plateauing; however, any surprise spike would bring back profit-taking. Nonetheless, the valuations are still incredibly strong over medium-term,” Soomro added.

Island Textile, up Rs108.50 to close at Rs1,596.50/share, and Phillip Morris Pakistan, strengthening Rs39.98 to finish at Rs1,489.99/share, were the top gainers of the day.

Khyber Tobacco, down Rs12.04 to close at Rs400.62/share, and Otsuka Pakistan, losing Rs11.50 to close at Rs300/share, were the main losers.

Pakistan Refinery led volumes with 57.480 million shares. The scrip gained Rs1.55 to end at Rs22.74/share. Fauji Fertiliser Bin Qasim posted the lowest turnover with 16.133 million shares, & gained Rs1.55 to end at Rs22.33/share.