PSX closes shortened week with 1,650-point gains


Good times are rolling for the stock market as the gaining streak continued for the sixth consecutive week. The KSE-100 index climbed up by 1,650 points (4.4 per cent) and closed at 39,258, which surprised most market seniors.

“Such a market behaviour is extraordinary in a futures contracts rollover week and with long weekend and Eid holidays ahead,” said a PSX player adding that the bulls were in the mood to toss the index above the major barrier of 40,000.

“The bullish week makes it 23 out of the last 25 trading sessions (starting Jun 26) that the benchmark closed in the green zone, taking cumulative returns to a staggering 16.5pc during this brief period,” stated an analyst at JS Global.

Several positive events continued to retain investors’ interest in equities. Commercial banks, cements, pharmaceuticals, automobiles, engineering and oil marketing companies combined to keep the market in deep green throughout the week. Moreover, the local exchange followed the major world bourses which were also in the grip of bulls.

The three-month low Covid-19 cases gave relief to investors who thought it the right time to accumulate discounted blue chips. Moreover, loans worth $505 million received during the week with the rupee-dollar parity settling at Rs166.98, also kept the momentum high. The government also managed to raise Rs168 billion n Treasury bill auction, with yields going up due to postponement in monetary policy to September. The SBP decision put life into the banking sector which saw renewed interest as it was generally believed to be a sign that the decline in interest rates may have bottomed out.

Foreign selling continued unabated with the overseas investors unloading equity worth $9.7m compared to a net sell of $9.3m the earlier week. Major outflow was witnessed in exploration and production, at $5.1m, and power and distribution $1.0m. On the domestic front, buying was reported by mutual funds at $11.3m and companies $2.2m. Average volume settled down 6pc at 390m shares while mean value traded clocked in at $101mn (up by 4pc).

According to analysts at Arif Habib Ltd, sector-wise positive contributions came from commercial banks, higher by 482 points, cement 285 points, power generation and distribution 113 points, technology and communication 111 points, and automobile assembler 109 points.

Whereas declines came from food and personal care, lower by 12 points and vanaspati one point. Scrip-wise gains were led by Lucky Cement, up 148 points, Bank Al Habib 103 points, Habib Bank 99 points, TRG 95 points, and Hub Power 77 points.

Other major news included; SBP expansion of scope of Shariah-compliant financial services; Economic Coordination Committee’s approval to revise POL products prices on fortnightly basis; and the government setting Rs1.5bn subsidy for local tractors.

Going forward, market pundits were selling optimism. They believed that the bullish trend may continue as major companies come up with their financial results which many be expected to post brighter bottom line for the quarter. The stability in rupee against the dollar due to steady inflow of funds could also keep the risk appetite of investors in check. With the economy on the mend and scarce political threat to the government, investors still regard it as the best time to buy.

Dawn News


Please enter your comment!
Please enter your name here