The stock market bounced back on Thursday and staged a handsome rally, taking cue from bullish activity in global markets and encouraging growth forecast for Pakistan by the International Monetary Fund (IMF).
With the revival of investor interest, the market skyrocketed over 1,100 points.
Earlier in the week, the IMF projected that Pakistan’s economy would grow 4% in current fiscal year 2021-22 and also endorsed previous fiscal year’s growth estimate of 3.9%.
Investors took cue from Pakistan’s timely repayment of $1 billion in debt, raised through Sukuk in 2016, and made fresh investment in the bourse.
They cherry-picked those stocks that had fallen to attractive valuations due to a prolonged bearish spell over the past few days.
Earlier, trading kicked off with minor ups and downs, but bulls took control of the market after a few minutes and with that the index began climbing at a steady pace. Strong investor sentiment helped accelerate the markets’ advance towards the end.
At close, the benchmark KSE-100 index recorded a surge of 1,111.9 points, or 2.57%, to settle at 44,333.68.
Speaking to The Express Tribune, Arif Habib Corporation Managing Director and CEO Ahsan Mehanti said that optimistic growth projections by the IMF rejuvenated investor interest in the bourse and triggered a rally.
“Moreover, the jump in international crude oil prices and the uptrend in global stock markets also fuelled bullish trading at the local bourse,” he said. “In addition, foreign fund inflows have resumed.”
Mehanti pointed out that foreign investment flows to Pakistan’s market had decelerated over the past few days.
AA Gold Commodities Director Adnan Agar said that news of Pakistan paying back $1 billion of foreign debt was hailed by investors, which aided the uptrend.
“Pakistan’s capacity to make such a huge payment in a timely manner was cherished by the market participants and it acted as a positive trigger,” he said.
Furthermore, the market had fallen sharply over the past few days and a recovery was expected sooner or later, the expert said.
JS Global analyst Neelam Naz said that the KSE-100 index made a remarkable recovery as investors cherry-picked stocks at attractive valuations across the board.
WorldCall Telecom (+18%), Unity Foods (+7.5%), Telecard (+7.5%), Treet Corporation (+7.5%) and Hascol Petroleum (+0.6%) contributed significantly to the total traded volume of 389 million shares.
“Healthy activity was witnessed in blue-chip stocks after a long time,” she said. “Looking ahead, the market needs to sustain its bullish momentum this week. Investors are advised to buy mainly blue-chip stocks on major dips across the board.”
Overall trading volumes increased to 388.6 million shares compared with Wednesday’s tally of 355 million. The value of shares traded during the day was Rs13.1 billion.
Shares of 557 companies were traded. At the end of the day, 464 stocks closed higher, 79 declined and 14 remained unchanged.
WorldCall Telecom was the volume leader with 66.2 million shares, gaining Rs0.37 to close at Rs2.43. It was followed by Unity Foods with 25 million shares, gaining Rs1.98 to close at Rs28.5 and Telecard Limited with 19 million shares, gaining Rs1.15 to close at Rs16.54.
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