The oil and banking sectors continue to fuel the rally

KARACHI:

The Pakistan Stock Exchange (PSX) on Thursday continued its upward momentum as it extended gains from the previous session, mainly on higher valuations in the oil and banking sectors.

The session started on a higher note as the KSE-100 hit an intraday high of 78,978.60. The index continued its positive mood with small ups and downs towards the close of trading.

The rally was also fueled by the results of a bill auction, which hinted at a rate cut at the next monetary policy statement, as well as expectations of a smooth passage of the federal budget.

News of the government’s plans to scrap up to 15% additional income tax on profits banks made on loans made to the finance ministry also boosted investor interest.

Although investors resorted to profit-taking later in the day that pushed the index to an intraday low of 78,294.22 points, the KSE-100 managed to maintain the positive sentiment and closed above 78,500 points.

“Equities closed higher, led by oil and banking stocks on strong valuations,” said Ahsan Mehanti, MD of Arif Habib Corp.

“The finance minister’s proposal to scrap the 15% additional tax on bank profits, the government’s approval of Rs 82 billion in oil and gas development company capital payments and Rs 92 billion in interest payments, and discussions on privatization state-owned enterprises played the role of catalysts in the upward activity on the PSX.”

In late trade, the KSE-100 was up 252.61 points, or 0.32%, at 78,528.25.

Topline Securities, in its report, highlighted that the Pakistani equity market had a positive day.

Fertilizer, banking, cement and exploration and production (E&P) sectors were positive contributors, with Fauji Fertilizer Company, United Bank, Thal Limited, Oil and Gas Development Company and Mari Petroleum collectively adding 214 points, Topline said.

Arif Habib Limited (AHL), in its commentary, noted that there were “additional gains with improving market breadth as the index attempted to carve out support at 78,000.”

On the other hand, Engro Corporation (-1.49%), MCB Bank (-1.31%) and Meezan Bank (-0.95%) were the biggest decliners in the index.

“For Friday, holding above 78,000 will likely create moves back toward 80,000,” the AHL added.

JS Global analyst Mohammed Waqar Iqbal noted that bulls continued to dominate proceedings in the stock market.

The rise was driven by the latest bond auction results, which pointed to a possible rate cut in the upcoming monetary policy statement, along with expectations that the FY25 federal budget will be passed without significant opposition.

Some profit-taking was seen later, but the index managed to stay in the green, he said. “Investors are advised to take positions in cement, technology and oil and gas stocks,” the analyst added.

Total trading volume fell to 283.5 million shares from Wednesday’s 469.8 million. The value of shares traded during the day was Rs 11.1 billion.

Shares of 426 companies were traded. Of these, 211 stocks closed higher, 150 declined and 65 remained unchanged.

WorldCall Telecom was the volume leader with 27.6 million shares traded, gaining Rs 0.01 to close at Rs 1.25. It was followed by K-Electric with 21.97 million shares, gaining Rs 0.09 to close at Rs 4.67 and Oil and Gas Development Company with 16.9 million shares, gaining Rs 1.83 to close at 137 .17 Rs.

Foreign investors were net sellers of shares worth Rs 2.03 crore, according to NCCPL.