KARACHI:
The Pakistan Stock Exchange (PSX) on Monday extended its upward trajectory from the previous week as investors took cue from the election of a new prime minister and upbeat economic data.
In the morning, trade opened on a bullish note, supported by a 30.2% year-on-year (y-o-y) contraction in the trade deficit to $14.87 billion for July-February 2023-24 and a fall in the Consumer Price Index (CPI). -Based on inflation at 23.1% in February 2024.
Additionally, foreign capital inflows, rupee stability and the reduced Karachi Interbank Rate (Kibor) have been instrumental in maintaining the market’s upward momentum.
Consequently, the KSE-100 broke the psychological barrier of 66,000 points in the morning, hitting an intraday high of 66,007.43 points.
Although the market dipped briefly in the afternoon, touching an intraday low of 65,532.58, positive sentiment arising from the election of Shehbaz Sharif as prime minister for the second time and ongoing political developments boosted the index.
The market closed the day near the 66,000 mark with significant gains, with investor interest mainly seen in the exploration and production (E&P) sector.
“Stocks closed higher as investors weighed the prime minister’s election, upbeat data on the trade deficit that shrank 30.2% y-o-y to $14.87 billion in July-February 2014 and CPI inflation falling to 23.1% for February 2024,” said Arif Habihsan Corp A. MD.
“Foreign inflows, rupee stability and falling Kibor played the role of catalysts in the higher close in the PSX.”
The KSE-100 ended up 626.04 points, or 0.96%, at 65,951.73.
Topline Securities, in its report, said the KSE-100 index maintained its upward momentum from the previous week. “In a major political development, Shehbaz Sharif was elected Prime Minister for the second time by the National Assembly, garnering 201 votes,” it said.
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PSX remains dynamic in political stability
In addition, the International Monetary Fund (IMF) proposed doubling taxes on both the employed and the self-employed. It also recommended raising the general sales tax rate to 18 percent on various staples such as unprocessed food, stationery, medicine and petroleum products, Topline added.
Arif Habib Limited (AHL) reported 57 stocks advanced while 37 declined in the KSE-100 index with E&P names leading the rally. Oil and Gas Development Company (+7.17%), Pakistan Petroleum (+6.01%) and Mari Petroleum (+2.78%) were the biggest contributors to gains, while banks were the main strength.
JS Global analyst Mohammed Waqar Iqbal said the KSE-100 broke the psychological resistance of 66,000 during the session but closed at 65,952, gaining 626 points. “There has been a lot of interest in the E&P sector,” he said.
“Going forward, we expect the uptrend to continue and recommend investors view any downside as an opportunity to buy stocks in the banking, cement and E&P sectors,” the analyst added.
Total trading volumes rose to 472.9 million shares compared to Friday’s 344.2 million. The value of shares traded during the day was Rs 16.3 billion.
Shares of 358 companies were traded. Of these, 184 stocks closed higher, 153 declined and 21 remained unchanged.
Kohinoor Spinning Mills was the volume leader with 67.4 million shares, gaining Rs 0.32 to close at Rs 5.68. It was followed by WorldCall Telecom with 60.2 million shares, gaining Rs 0.08 to close at Rs1.37 and K-Electric with 36.8 million shares, gaining Rs 0.15 to close at Rs5.02.
Foreign investors were net buyers of shares worth Rs 675.3 million, according to NCCPL.
Published in The Express Tribune, March 5u2024.
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