KSE-100 posts recovery, powers past 60,000 with nearly 2.9% gain

Value investors marked their return to the Pakistan Stock Exchange (PSX) on Wednesday as the benchmark KSE-100 index registered an increase of nearly 3% during intra-day trading.

At close, the benchmark index settled at 60,863.62 level, an increase of 1,692.64 points or 2.86%.

Across-the-board buying was witnessed as index-heavy sectors including automobile assemblers, chemical, commercial banks, fertilizer, oil and gas marketing companies, oil and gas exploration companies, property and refineries traded in the green.

The positive sentiment comes a day after heavy selling was seen at the bourse as the benchmark KSE-100 Index settled at 59,171 level on Tuesday, a decrease of 4.11% or 2,534 points, the highest day-to-day fall in terms of points in KSE-100 history.

The benchmark index has declined by nearly 10% from its peak of 66,427 achieved on December 12, just two weeks ago, conveying the volatility seen at the PSX in recent weeks.

An analyst said the market is expected to post a recovery.

“The stock valuations remain attractive, while economic fundamentals remain intact,” Sana Tawfik, an analyst at Arif Habib Limited (AHL), told Business Recorder.

“As the market enters a new month, fresh liquidity injection is expected to enter the bourse,” she added.

Another expert, speaking on condition of anonymity, said the KSE-100 Index had gained faster than what fundamentals dictated so a ‘correction’ was expected.

“A lot hinges on foreign exchange inflows and whether Pakistan can attract investment in its state-owned companies, and if it can resolve power sector woes,” the analyst told Business Recorder. “Without these investment flows, the PSX will continue to see a volatile ride.”

Internationally, Asian stocks rose broadly on Wednesday, tracking a rally from Wall Street as investors latched on to the year-end optimism driven by expectations that the Federal Reserve could begin cutting rates as early as next March.

As traders wind down with few critical economic data releases scheduled between now and the end of the month, the market mood continues to be dominated by the prospect that major central banks globally could begin easing rates in 2024, with the Fed taking the lead.

Those bets have spurred a bout of risk taking and driven a rally in global equities, with MSCI’s broadest index of Asia-Pacific shares outside Japan last up 0.6%.

The index was on track for a 2.3% gain this month and looked set to end the year roughly 2.5% higher, having clocked a 20% decline in 2022 - its worst performance.

Meanwhile, the Pakistani rupee continued to march upward against the US dollar for the 11th successive session as it appreciated 0.06% in the inter-bank market on Wednesday. As per the State Bank of Pakistan, the local unit settled at 282.20 after an increase of Re0.17 against the greenback.

Volume on the all-share index edged lower to 669.3 million from 670.8 million a session before.

The value of shares declined to Rs16.1 billion from Rs17.1 billion in the previous session.

K-Electric Ltd was the volume leader with 102.2 million shares, followed by Fauji Foods Ltd with 58.1 million shares, and PTCL at 55.4 million shares.

Shares of 357 companies were traded on Wednesday, of which 274 registered an increase, 63 recorded a fall, while 20 remained unchanged.