Biggest one-day gain for stock market as politics finds direction

KARACHI: Stocks on Monday snapped up the largest-ever single-day gain, celebrating the culmination of a political crisis that could have battered the country's beleaguered economy beyond repair, amid rupee’s mighty recovery, traders said.

Making history, the benchmark KSE100-share Index gained a whopping 1,700.38 points or 3.83 per cent to close at 46,144.96 points after touching an intraday high of 46,215.54. The Alpha Beta Core’s Khurram Schehzad gave the whole credit of this historicperformance to a political environment that is now far less uncertain than before and without a doubt remains the key to unlocking the sentiment. “Clarity is king and that’s what investors love, though economic challenges remain,” Schehzad said.

The KSE-30 Shares Index also rallied to gain 689.74 points or 4.05 per cent to finish the day at 17,703.87 points. Zafar Moti, a former PSX director, views this rally as a spontaneous consequence of overnight reversal of political situation, which restored investors’ confidence. Besides, he said, the dollar retreat also added to investor sentiment. “Also, these two positive factors absorbed the shock of a 250 bps increase in the discount rate, which could have raised interest rates to 15 per cent after other charges,” Moti added.

Both turnover and traded value also surged by more than 100 per cent. Recording a trade of 330 million shares, volumes swelled two-fold to 557.67 million from 227.88 million, while value doubled to Rs 13.362 billion from Rs 6.785 billion. Turnover in future contracts also zoomed to 105.99 million shares from 76.02 million. The market capital expanded to Rs 7.710 trillion from Rs 7.474 trillion. Out of 386 active names, 330 ended higher, 45 lower while 11 closed unchanged.

Ali Najib of the Topline Securities said it is a historic day for Pakistan’s capital market as the benchmark index posted the highest-ever gain of 1,700 points in a given day. “The aforesaid rally is attributed to the change in the political setup of the country over the last weekend,” he said.

During the trading hours, a bullish sentiment went through the roof as massive buying was seen across the board as investors celebrated some resolution of the highly uncertain political situation over the last few days, he added.

The Bata (Pakistan) rose Rs 145.19 to Rs 2,484.39/share to emerge as the top gainer of the day, followed by the Rafhan Maize that grabbed Rs 100 to close the day at Rs 11,500/share. The Gatron Industries fell by Rs 30.23 to Rs 471.67/share to end up as the worst loser of the day, followed by the Mitchells Fruit Farms which dropped Rs 9.21 to close at Rs 118.82 per share.

Analyst Ahsan Mehanti of the Arif Habib Corp said stocks closed higher on easing political uncertainty and a big rupee recovery. Falling global crude oil prices, easing economic uncertainty and speculation over the positive outcome of the election of a new government gave sentiments a massive boost, Mehanti added.

The WorldCall Telecom was the volume leader with 140.79 million shares, followed by the Cnergyico PK with 40.14 million shares. Major turnover-makers were the Fauji Cement, the Hum Network, the Pak International Bulk, the First National Equities, the Maple Leaf, the Hascol Petrol, the K-Electric Ltd and the Unity Foods Ltd.