Equity market hits upper cap on surprise rate cut, IMF loan approval

Equity market hits upper cap on surprise rate cut, IMF loan approval

KARACHI: The equity market witnessed unprecedented surge by 1,502 points 4.8 percent over the previous day on Friday after recording upper cap during the day on surprise rate cut and IMF loan approval

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 32,831 points as against 31,329 points showing an increase of +1502 points.

Analysts at Arif Habib Limited said that the market saw an unprecedented surge today that led to market halt at 10:52 PM for 60mins.

A host of factors, all positive, from SBP’s surprise rate cut to deferment of G20 debt and IMF provided COVID-19 relief fund contributed to the ascend in index.

The benchmark index realized an increase of 1927 points during the session. Market also realized 300 million mark for shares traded.

Banking sector stocks that were not supposed to perform due to NIM suppression also saw increase in rates touching recent highs, but subsided by the end of session.

Throughout the session, Cement, Fertilizer, Steel, Pharma sectors traded at upper circuit, primarily for the reason that these sectors were largely leveraged and the rate cut helped reduce the incidence of financial charges.

On the other hand, WTI priced dropped during the session to $18.05 during the session without denting the sentiment for local oil & gas scrips.

Banking sector contributed the most to the volumes with 53.2 million shares, followed by Cement (41.4 million) and Power (29 million). Among scrips, KEL topped the volumes with 22.9 million shares, followed by HASCOL (21.3 million) and BOP (19.6 million).

Sectors contributing to the performance include Fertilizer (+323 points), Cement (+187 points), E&P (+171 points), Power (+149 points) and O&GMCs (+98 points).

Volumes increased significantly from 118.9 million shares to 302.4 million shares (+54 percent DoD). Average traded value also increased by 84 percent to reach US$ 52.6 million as against US$ 28.5 million.

Stocks that contributed significantly to the volumes include KEL, HASCOL, BOP, UNITY and FCCL, which formed 32 percent of total volumes.

Stocks that contributed positively to the index include ENGRO (+144 points), HUBC (116 points), FFC (+112 points), LUCK (+88 points) and DAWH (+66 points).

Stocks that contributed negatively include BAHL (-24 points), ABL (-18 points), BAFL (-6 points), MEBL (-5 points), and SHFA (-5 points).