Stocks gain as fuel price cut boosts inflation outlook

Stocks rose on Monday as a cut in fuel prices eased inflation concerns and the finance minister reaffirmed the country’s economic recovery, dealers said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index gained 237.88 points or 0.48 percent to close at 49,731.35 points. The highest index of the day remained at 49,919.03 points while the lowest level was recorded at 49,317.59 points.

“Bullish activity continued in the earning season as investors weigh rupee recovery and finance minister affirmation on improving economic data to maintain positive credit rating,” said Ahsan Mehanti, an analyst at Arif Habib Corp.

"Forx reserves near to $7.6 billion, expected fall in inflation on cut in local POL prices, reducing current account deficit and likely release of next IMF tranche under SBA played a catalytic role in te bullish close."

The KSE-30 index also increased by 225.25 points or 1.33 percent to close at 17,131.51 points. Traded shares dropped by 88 million shares to 467.383 million shares from 556.389 million shares. The trading value decreased to Rs14.119 billion from Rs15.450 billion. Market capital expanded to Rs7.316 trillion against Rs7.286 trillion. Out of 363 companies active in the session, 219 closed in green, 132 in red and 12 remained unchanged.

Analyst Naveed Nadeem at Topline Securities said the equities market experienced a strong start to the week, with the index touched 49,919 points levels within the first five minutes of trading.

"As the index approached the significant 50,000 level, investors decided to lock in profits, leading to a brief dip to an intraday low of 49,317, representing a loss of 175.88 points. Eventually, the market rebounded, and the index gained 0.48 percent."

The market's positive momentum was driven by the banking, technology, and cement sectors, with TRG, PSEL, THALL, MLCF, and MCB collectively contributing 143 points. In contrast, ENGRO, UBL, and LUCK incurred a combined loss of 48 points.

The highest increase was recorded in Nestle Pakistan, which rose by Rs102 to Rs7,300 per share, followed by Philip Morris Pak., which increased by Rs40.50 to Rs580.50 per share. A significant decline was noted in Rafhan Maize, which fell by Rs178.11 to Rs8,200 per share, followed by Pak Hotels, which decreased by Rs38.30 to Rs484.71 per share.

Brokerage Arif Habib Ltd said the the market experienced heightened volatility as the benchmark index initially surged by more than 400 points, only to dip into negative territory before staging a late-day rally to close in positive territory.

"The trading session also witnessed the highest daily trading volume since the market's August highs, with a reported 370 million shares exchanged. This substantial volume suggests an increased distribution in the market, possibly marking multi-year highs in this activity."

The brokerage advised investors to remain vigilant for sharp downward movements in the near term, especially as the market approaches the significant 50,000-point level.

K-Electric Ltd. remained the volume leader with 98.168 million shares which closed higher by 2 paisas to Rs3.15 per share. It was followed by P.T.C.L. with 22.603 million shares, which closed lower by 17 paisas to Rs6.95 per share.

Other significant turnover stocks included Pak Int. Bulk, WorldCall Telecom, Pak Elektron, Maple Leaf, Pak Petroleum, Pak Refinery, TRG Pak Ltd and HBL Invest Fund. Shares’ turnover in the future contracts decreased to 98.555 million shares from 112.086 million shares.