Stocks gain over one percent on bargain hunting

Stocks rallied by more than 1 percent on Wednesday, extending the previous session’s gains on the back of attractive valuations and expected positive outcome from the Paris meeting of the Financial Action Task Force (FATF), dealers said.

Salman Ahmed, head of equity sales at Abba Ali Habib said, “The market showed technical recovery mostly because in the past sessions the index received heavy beating.”

Buying surfaced after some of the financial institutions bought shares before year-end closing to show their balance sheet on the positive side. Investors were waiting for a political or economic trigger, and above all the FATF decision to set the tone of the bourse, Salman added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index rose 1.14 percent or 471.90 points to close at 41,717.99 points.

KSE-30 shares index gained 1.38 percent or 278.88 points to close at 20,557.41 points.

Of the 382 active scrips, 247 advanced and 115 declined, whereas 20 remained unchanged. The ready market volumes stood at 235.495 billion shares compared to a turnover of 179.771 billion shares in the previous session.

An analyst from Abba Ali Habib said positive expectations related to the FATF decision coupled with anticipation of extension in the deadline of foreign assets declaration under the amnesty scheme eased market pressure.

“The recovery in the market can be attributed to attractive valuations where investors took the opportunity to buy stocks at discounted prices,” he added.

Investors hope that the plenary committee of FATF would give more time to Pakistan before taking any harsh action, and ask to remove points raised by the committee to make the system more stringent against money laundering, terror financing and any other actions which promote the black economy.

The market made cumulative gains of 740 points in two days following a 2,700 drop in the index in the four trading sessions before Tuesday.

The highest gainers were Unilever Foods, up Rs115.00 to close at Rs8,000.00/share, and Nestle Pakistan, up Rs100.00 to finish at Rs11,500.00/share.

Companies that booked highest losses were Philip Morris Pakistan, down Rs148.27 to close at Rs2,818.55/share, and Pakistan Tobacco, down Rs74.90 to close at Rs2,050.10/share.

TRG Pakistan Limited recorded the highest volumes with a turnover of 8.248 million shares; it gained Rs0.89 to close at Rs29.30/share. It was followed by Sui North Gas with a turnover of 5.950 million shares. Its scrip gained Rs3.2 to close at Rs99.38/share.

The lowest volumes were witnessed in Power Cement. It recorded a turnover of 45.681 million shares, whereas the scrip lost Rs0.04 to end at Rs8.35/share.