Oversold equities lift capital market

Stocks rallied on Wednesday as investors swooped on oversold stocks with Saudi financial support and retreating commodity markets lifting hopes the pressures on economy might ease in the near term, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 Share Index closed higher by 296.76 points or 0.66 percent to 45,369.14 points, touching a high of 45,460.73 and a low of 45,072.38 points during the trade.

Ahsan Mehanti, at Arif Habib Corp, said, stocks closed record higher after reports of SBP approving terms of $3 billion Saudi Fund and rupee gains.

Strong economic outlook ahead of the release of IMF tranche and 33 percent year-on-year surge in exports near to record $2.93 billion in November 2021, remittances, and rising global crude oil prices supported a bullish close, Mehanti said.

KSE-30 Share Index also rose 146.24 points or 0.84 percent to 17,575.86 points.

JS Research in its market wrap said the benchmark index started the month on a good note with investor interest seen mostly in blue-chip stocks, which were trading on deep discount.

“Going forward, we recommend investors to adopt a buy on dips strategy in banks, fertilizers, and cement sectors,” the brokerage said.

Traded shares, however, decreased 170 million to 241.06 million from 411.46 million shares, whereas trading value dropped to Rs9.22 billion from Rs34.82 billion.

Market capital expanded to Rs7.750 trillion from Rs7.720 trillion. Out of 337 companies active in the session, 209 posted gains, 108 losses, while 20 remained unchanged.

Topline Securities in a note said after a slightly positive opening the market made an intraday high of 387 points and remained positive throughout the session.

Investors cheered lower international commodity prices and yesterday’s smooth MSCI related trades, the brokerage said

LUCK, UBL, and HBL, being the major gainers, cumulatively contributed 99 points to the index.

Rafhan Maize led the gainers by rising Rs161.37 to Rs9,899/share, followed by Nestle Pakistan, jumping Rs131.46 to Rs5,521.54/share.

Sapphire Textiles was the loss leader as it fell by Rs86.32 to Rs1064.75/share, followed by Sapphire Fiber, going down by Rs52.75 to Rs845.25/share.

Arif Habib Ltd in a report said the index stayed in the green zone throughout the day as the market celebrated the transition from emerging to frontier market.

Index opened with a bullish momentum as investors aggressively bet on cement, steel, and technology stocks. Later, accumulation was witnessed in the banking sector as CPI (Consumer Price Index) inflation for the month of November 2021 clocked in at 11.53 percent year-on-year (+3 percent month-on-month), the highest in 21 months influenced by a record hike in fuel prices, the brokerage said.

According to Arif Habib Ltd report, a sharp upside was witnessed in the last trading hour as short-sellers jumped in to square off trading positions.

Fauji Foods Ltd was the volume leader with 38.34 million shares, followed by Fauji Foods (R) with 37.06 million shares.

Stocks that recorded significant turnover included TPL Properties, Maple Leaf, TRG Pakistan Ltd, WorldCall Telecom, Unity Foods Ltd, Fauji Cement, Pioneer Cement, and Telecard LimitedXB.

Turnover in the future contracts decreased to 72.31 million shares from 77.46 million on Tuesday.