Bulls stage comeback on earnings' prospects
Pakistan Stock Exchange (PSX) rebounded on Wednesday as the KSE-100 index rose nearly 450 points over investor optimism about the ongoing corporate result season and the potential of ratings upgrade.
The benchmark index ended trading at 136,379.97, reflecting a gain of 440.10 points, or 0.32%. It came following a dip of 563 points in the previous session.
Market sentiment was buoyed by anticipation of robust company results and attractive dividend announcements. Adding to the upbeat tone was speculation about credit rating upgrade by Moody's owing to signs of economic stabilisation.
Also, the government's commitment to holding constructive dialogue with the industrial sector on budgetary concerns was seen as a favourable step. Buying activity was mainly concentrated in sectors like fertiliser and cement, which helped drive the index to intra-day high of 137,232. It later came off highs but still closed the day with modest gains.
According to Arif Habib Corp MD Ahsan Mehanti, stocks showed recovery in the earnings season rally on expectations of strong financial results, dividend payouts and potential Moody's upgrade amid strong economic recovery.
Government's affirmation of negotiations with industries over budget issues, along with reports about finance minister presenting compelling evidence to Moody's for ratings boost, fuelled the bullish close at the PSX, he said.
KTrade Securities, in its report, wrote that profit-taking persisted at the PSX as the index experienced another mixed session. Despite the cautious mood, the KSE-100 managed to go up by 440 points (+0.32%).
The rally was driven primarily by strong performance by the fertiliser sector, with notable contributions coming from Fauji Fertiliser Company (FFC), Engro Holdings and Engro Fertilisers. Looking ahead, the broader uptrend appears intact, though investors remain cautious amid concerns over potential tariff adjustments and the earnings season, it said.
Topline Securities observed that Wednesday's session saw consolidation, with the index oscillating between intra-day high of 137,232 and intra-day low of 135,543 as investors booked profits, particularly in banking stocks.
Support mainly came from FFC, Engro Holdings, Engro Fertilisers, Pakistan Services and Attock Refinery, which added 1,160 points. On the downside, UBL, Meezan Bank and MCB Bank erased 443 points, Topline added.
JS Global analyst Muhammad Hasan Ather commented that the KSE-100 index traded near record highs, rising 1,292 points to intra-day high of 137,232 amid strong corporate earnings and optimism about Moody's ratings upgrade.
Investor sentiment was buoyed by positive economic signals, including the falling inflation, a stable rupee and rising foreign reserves. Finance Minister Muhammad Aurangzeb's meeting with Moody's further reinforced confidence, he said.
Overall trading volumes stood at 705.9 million shares compared with Tuesday's tally of 879.1 million. The value of shares traded was Rs32.2 billion. Shares of 482 companies were traded. Of these, 223 stocks closed higher, 221 dropped and 38 remained unchanged.
Pakistan International Bulk Terminal was the volume leader with trading in 90.7 million shares, rising Rs0.96 to close at Rs9.69. It was followed by First Dawood Properties with 40.6 million shares, gaining Rs1 to close at Rs6.11 and DH Partners with 37.2 million shares, up Rs1.82 to close at Rs42.06. Foreign investors sold shares worth Rs696.4 million, the National Clearing Company reported.
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