The Pakistan Stock Exchange (PSX) experienced a robust surge on Thursday, with the benchmark KSE-100 index gaining 313 points in response to the recent monetary policy decision.
The index closed at 41,113 points, a notable increase from the previous day’s close at 40,800 points.
Analysts at Arif Habib Limited noted that the market’s upward momentum continued from the previous day, attributing the positive trend to the monetary policy rate increase. The decision to raise the policy rate was widely interpreted as a signal of Pakistan’s intention to enter the International Monetary Fund (IMF) program.
The nominal increase of 25 basis points (bps) in the policy rate reassured investors that the impact on earnings would be marginal in nature, diminishing concerns about a significant impact on corporate earnings. This contributed to a positive sentiment in the market, with investors showing interest in various sectors.
The banking sector led the volumes, with Bank of Punjab (BOP) accounting for 33 million shares out of the total sector volume of 44 million. The engineering sector, particularly in steel, also performed well, resulting in trading close to the upper circuit for many scrips in the steel sector.
Contrary to recent sessions, blue-chip stocks gained prominence, and investors displayed interest in purchasing shares of Habib Bank Limited (HBL) and United Bank Limited (UBL). The performance of these key players in the market added to the overall positive sentiment.
Sectors contributing significantly to the market’s performance included Banks (+199 points), Cement (+59 points), Engineering (+25 points), Food (+15 points), Oil & Gas Marketing Companies (O&GMCs) (+14 points), and Fertilizer (-17 points).
Market volumes remained strong at 229 million shares, only slightly lower than the previous day’s 240 million shares (-5 percent day-on-day). The average traded value declined by 3 percent to reach $61.3 million compared to the previous day’s $63.3 million.
Stocks that played a substantial role in the trading volumes included Bank of Punjab (BOP), Dawood Hercules Limited (DSL), Pak Elektron Limited (PAEL), Pakistan Services Limited (PASL), and Pakistan International Bulk Terminal Limited (PIBTL), accounting for 35 percent of the total volumes.
Notable contributors to the positive market performance included Bank Al-Habib Limited (BAHL) (+61 points), United Bank Limited (UBL) (+40 points), Lucky Cement Limited (LUCK) (+39 points), Habib Bank Limited (HBL) (+22 points), and Pakistan Petroleum Limited (PPL) (+22 points).
On the flip side, stocks that made negative contributions included Dawood Hercules Corporation Limited (DAWH) (-13 points), Oil & Gas Development Company Limited (OGDC) (-7 points), The Searle Company Limited (SEARL) (-7 points), Fauji Fertilizer Company Limited (FFC) (-6 points), and Engro Polymer & Chemicals Limited (EPCL) (-6 points).
The overall bullish trend in the market indicates renewed investor confidence, with positive sentiment driven by key policy decisions and expectations of entering the IMF program. As the market continues to react to economic developments, investors are advised to stay informed and adapt their strategies accordingly.