Stocks rise for 2nd day as rupee barrels ahead

Our Correspondent
Wednesday, Sep 28, 2022

KARACHI: Stocks rallied for a second day on Tuesday as a change of guard at the finance ministry, slated to be made official today, bolstered economic hopes, while sentiments also fed on rupee’s advance on dollar, traders said.

The benchmark KSE-100 Shares Index surged by 366.69 points or 0.89 percent to close at 41,518.23.

Topline Securities in its daily market report attributed Tuesday's stellar run to a global commodity price cool-down, hopes of inflows of flood aid financing from global institutions, and local currency’s recovery. The rupee's winning streak continued with a gain of 1.33 percent against the US dollar on Tuesday.

“E&P, fertiliser, and banking sector stocks contributed positively to the index where OGDC, EFERT, PPL, UBL, and MCB added 182 points, cumulatively. On the flip side, ENGRO, MEBL, and MARI lost 40 points collectively,” Topline report added. Darson Research said local equities finished on an affirmative note for the second consecutive day; however, late profit-taking trimmed some of the early gains.

The brokerage said stocks were majorly lifted by the robust rupee.

Arif Habib Limited (AHL) in a post-market note credited a build-up in the forward momentum to political clarity and strengthening rupee.

According to the AHL report, the market crossed the 41,500-point mark in the initial hours.

“A wave of selling pressure gripped the stocks and erased some of the gains; however, a buying spree, towards the end of the session, lifted the index to a strong green close.”

Index-heavy automobile, cement, banking and oil sector scripts closed the day with gains, the report added.

Capital Stake, a financial research company, stated changes on the political front and return of Ishaq Dar as upcoming minister of finance helped improve investors’ confidence.

“Moreover, the start of the result season also proved a positive trigger for investors.”

Pearl Research in its commentary said continued appreciation of rupee, up Rs3.12, was instrumental in the extension of the rally.

“Likewise, world oil prices are declining due to a strengthening dollar and slowdown in the global economy,” it added.

“Going forward, we expect the market to continue the uptrend. Hence, we recommend investors to adopt the “buy on dips” strategy in the upcoming sessions,” Pearl Research said in its report. Sectors driving the benchmark KSE-100 Index north included oil and gas exploration (93.11 points), banking (54.93 points) and cement (42.48 points).

Volume on the all-share index rose to 230.65 million from 213 million on Monday.

On the other hand, the value of shares traded inched up to Rs9.6 billion from Rs9.5 billion recorded in the previous session. TPL Pakistan was the volume leader with 26.8 million shares, followed by TRG Pakistan with 20.8 million shares and K-Electric with 12.8 million shares.

Shares of 338 companies were traded on Tuesday, of which 197 registered an increase, 111 recorded a fall, and 30 remained unchanged.

JS Research said going forward, investors are recommended to remain cautious and avail any downside to accumulate blue chip stocks.

Meanwhile, national CPI is expected to clock in at 27.1 percent year-on-year in September 2022 compared to 27.3 percent year-on-year last month. In month-on-month comparison, NCPI would be 2.0 percent attributable to upsurge in food prices.