Stocks bounce back, up 690 points amid declining inflation numbers

KARACHI: Stocks resumed upward momentum on Tuesday and closed higher by 690 points amid upbeat data on declining inflation.The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 share index increased by 690.39 points or 0.85 per cent to 81,804.59 points against 81,114.20 points recorded in the last session. The highest index of the day remained at 81,980.37 points while the lowest level was recorded at 81,119.24 points.

Analyst Ahsan Mehanti at Arif Habib Corp said, “Stocks closed bullish led by scrips across the board amid upbeat data on 6.9 per cent YoY receding CPI inflation for September, expected to bring SBP policy rate cut.”

He said that falling local petroleum product prices, and surging FX reserves played a catalyst role in the bullish close.The KSE-30 index increased by 235.33 points or 0.91 per cent to 26,011.31 points against 25,775.98 points.

Traded shares rose by 62 million shares to 359.081 million shares from 297.994 million shares. The trading value rose to Rs17.160 billion from Rs14.103 billion. Market capital narrowed to Rs10.712 trillion against Rs10.619 trillion. Of the 436 companies active in the session, 243 closed in green, 139 in red and 54 remained unchanged.

Maaz Mulla, an analyst at Topline Securities, said the session was dominated by the bulls, with the KSE-100 index reaching an intraday high of 866 points, ultimately closing at 81,804 points (up 0.85 per cent or 690 points).

Key drivers of the market rally included heavyweights such as HUBC, MARI, OGDC, BAHL and PPL, collectively contributing 533 points to the index. Conversely, BAFL, HBL, POL, UBL and MEBL pulled the index down by a combined 170 points.

On the economic front, the Consumer Price Index (CPI) for September 2024 recorded a year-on-year increase of 6.9 per cent, down from 9.6 per cent in August 2024, marking the lowest inflation reading in 44 months.

The highest increase was recorded in Unilever Pakistan Foods Limited, which rose by Rs194.94 to Rs17,270 per share, followed by Hallmark Company Limited, which increased by Rs78.42 to Rs1,116.73 per share. A significant decline was noted in Pakistan Engineering Company Limited, which fell by Rs55 to Rs755 per share; Sitara Chemical Industries Limited followed it, which closed lower by Rs14.92 to Rs270.08 per share.

Brokerage Arif Habib Ltd stated that the KSE-100 resumed its upward momentum, closing in on the 82k level once again. The brokerage said that September’s CPI came in cooler than expected at 6.9 per cent YoY, supporting further monetary easing. Cement stocks saw strong demand, with the larger names like FCCL (+5.3 per cent), MLCF (+3.85 per cent), DGKC (+4.07 per cent), and PIOC (+3.28 per cent) benefiting from the recent rally in smaller players.

The market is expected to maintain higher levels, with support residing at 80-81k. Fauji Cement remained the volume leader with 29.125 million shares which closed higher by Rs1.34 to Rs26.62 per share. Hub Power Co. XD followed it with 19.621 million shares, which closed higher by Rs7.13 at Rs126.47 per share.

Other significant turnover stocks included WorldCall Telecom, Kohinoor Spinning, K-Electric Ltd, TRG Pak Ltd, PIA Holding Company, Maple Leaf, Pace (Pak) Ltd and Fatima Fert.In the futures market, 315 companies recorded trading, of which 224 increased, 86 decreased and 5 remained unchanged.