Stocks rise on late value hunting ahead of monetary statement
Stocks on Tuesday snapped a long losing streak on last-hour value hunting, showing investors were no more scared of an expected hawkish monetary policy, announced later in the day, traders said.
State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) raised policy rate by 100bps to 9.75 percent to curb inflationary and mounting external account pressures.
It is on the lower side of the most of the market expectation of 100-150bps.
According to SBP, it is close to achieving the target of mildly positive rates hinting towards the end of current phase of tightening keeping in view the revised inflationary targets.
KSE-100 Shares Index jumped by 370.34 points or 0.86 percent to 43,246.71 points at Pakistan Stock Exchange (PSX), testing a day high of 43,265.80 points and a low of 42,710.12 points.
Pearl Research in its post-market review said the index moved both ways, but successfully managed to close in green zone as participants were eyeing a lower-than-expected hike in policy rate, which thus, uplifted the sentiment.
KSE-30 Shares Index also gained 143.97 points or 0.85 percent to close the day at 17,044.74 points.
Analysts at YHS Research said after a day of the bearish run, the stocks staged a rally as investors brushed aside their nervousness over the monetary policy announcement.
However, equity markets around the globe showed negative trends, the brokerage added.
Traded shares increased by 62 million to 212.35 million from 150.38 million, while traded value rose to Rs6.77 billion from Rs5.27 billion. Market capital increased to Rs7.419 trillion from Rs7.367 trillion. Out of 323 companies active in the session, 237 posted gains, 67 losses, while 19 remained unchanged.
Topline Securities in a note said it was a lackluster day for the bourse as the benchmark index initially opened in the negative territory and remained sideways most of the day ahead of monetary policy announcement in the evening.
However, investors opted for value hunting across the board during the last trading hours, the brokerage said. Technology, cement, energy, and food stocks led the show with TRG, MLCF, LUCK, MARI, and UNITY adding 161 points to the index, while OGDC, SNGP, and ABL together eroded 38 points.
Ahsan Mehanti at Arif Habib Corp said stocks staged recovery pricing in upbeat auto sales, surging 62 percent year-on-year for July-November period of this fiscal year and market projections for a reduction in trade and current account deficit. Remittances rising 10 percent for July-November to $13 billion and strong exports data led to a bullish close, Mehanti said.
Nestle Pakistan led the gains by rising Rs83.75 to Rs5,440/share, followed by Sapphire Textile, up Rs50.18 to close at Rs898.97/share.
Gatron Industries suffered worst losses of the day, falling Rs39.37 to Rs485.62/share, followed by Sanofi-Aventis, down Rs17.07 to end at Rs558.83/share.
JS Research in its market wrap said healthy participation was witnessed in tech stocks.
Major contribution to the traded volume of 212 million shares came from WTL (+5.9 percent), BYCO (+6.0 percent) TPLP (+4.3 percent), TELE (+4.6 percent) and TRG (+7.5 percent).
“Going forward, we expect range-bound activity to continue due to concerns over the economic outlook and geopolitical situation of the country,” analysts at JS Research said while recommending investors to avail any downside as an opportunity to buy in the banking and energy sectors.
WorldCall Telecom was the volume leader with 21.07 million shares, while Byco Petroleum, with 16.13 million shares, was the second highest traded stock of the day.
TPL Properties, Telecard Limited, TRG Pak Ltd, Ghani Glo Hol, Azgard Nine, Treet Corp, Unity Foods LtdXR, and Hum Network were among some notable turnover-makers. Turnover in the future contracts increased to 74.25 million shares from 38.70 million on Monday.
