Bulls maintained their grip on the Pakistan Stock Exchange on Tuesday owing to a host of positive triggers and added over 300 points to the benchmark KSE-100 index.
Investors took cue from a drop in inflation reading to 8.4% in the first month (July) of current fiscal year and poured fresh investment into the market.
In addition to that, the rally received support from Adviser to Prime Minister on Commerce Abdul Razak Dawood’s announcement of exports touching an all-time high of $2.35 billion in July 2021.
Similarly, record high petrol sales by oil marketing companies in July signaled a revival of economic activities in the country and lifted investor interest in the stock market.
Sales of two major Japanese car companies in the country also climbed to fresh peaks last month.
All these encouraging news reports painted a positive picture of Pakistan’s economy and triggered extensive buying at the bourse. Market participants expected a further improvement in the macroeconomic indicators in the ongoing fiscal year.
Fresh depreciation of the rupee, which fell to Rs163.89 against the greenback on Tuesday, failed to restrict the upward momentum at the bourse because market players anticipated a further rise in export earnings in coming months.
Earlier, trading began with a spike and the market climbed steadily throughout the day. The uptrend accelerated towards the close, which inflated the gains.
At close, the benchmark KSE-100 index recorded an increase of 305.07 points, or 0.64%, to settle at 47,758.32.
Arif Habib Limited, in its report, stated that the market continued its uptrend with an improvement in trading volumes. The benchmark index added a total of 355 points during the session and closed up by 305 points.
Oil and gas marketing, banking, refinery, technology and textile sectors contributed positively to the index whereas exploration and production and steel sectors remained under pressure.
“Optimism emerged on the back of rupee depreciation that will have a positive bearing on the earnings of textile, technology and exploration and production sectors as well as upcoming financial results,” the report added.
JS Global analyst Neelum Naz said that the Pakistan stock market maintained its positive momentum, hitting a high of +355 points and closing higher by 305 points at 47,758.
WorldCall Telecom (+4.3%), Telecard Limited (+7.4%), Byco Petroleum (+2.4%), TPL Corp (+1.8%) and Citi Pharma (+5.5%) were the highest contributors to the total volume, accounting for a cumulative 133 million shares.
The technology sector outperformed other sectors, contributing 27% to the total traded volume where WorldCall Telecom (+4.3%), Avanceon (+0.6%), TRG Pakistan (+2.9%), NetSol (+2.2%) and Telecard Limited (+7.4%) closed in the positive region.
Among oil marketing companies’ stocks, Hascol Petroleum (+13.7%) closed at its upper circuit.
On the news front, the government’s overall FY22 export target of $40 billion kept the textile sector in the limelight.
“Going forward, we recommend investors to view any downside as a buying opportunity in the cement, steel, technology and textile sectors,” the analyst said.
Overall trading volumes soared to 443.2 million shares compared with Monday’s tally of 252.3 million. The value of shares traded during the day was Rs16.2 billion.
Shares of 482 companies were traded. At the end of the day, 335 stocks closed higher, 120 declined and 27 remained unchanged.
WorldCall Telecom was the volume leader with 36.4 million shares, gaining Rs0.15 to close at Rs3.64. It was followed by Telecard Limited with 29.5 million shares, gaining Rs1.18 to close at Rs17.04 and Byco Petroleum with 29.4 million shares, gaining Rs0.24 to close at Rs10.32.
Foreign institutional investors were net buyers of Rs210.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.