Stock market gains 900 points on policy rate ease expectations

KARACHI: The stock market gained 900 points or 2.6 percent on Monday on expectations of ease in policy rate.

The Index closed at 35,277 points as against 34,378 points showing an increase of 900 points.

Analysts at Arif Habib Limited said expectation of volumetric increase in Cement dispatches fueled buying activity since Wednesday, and the confirmation thereof gave confidence to the investors of their thesis.

Cut in policy rate by SBP is also on the anvil, whereby market is keenly waiting for more cues from monthly CPI (yet to be released) and downward adjustment of NSS rates (which are linked in PIB yields, and again yet to be materialized).

Temperature on political front also seemed to be cooling-off, giving way to the talks of NRO with jailed politicians. Overall, the situation seems ripe for the re-conversion of funds lately deployed in Fixed income back into Equities that in itself means significant jump in the index as the majority of the AUMs of the mutual fund industry went to money market funds.

Overall, the index gained 931 points and closed the session at +900 points. The Index also crossed 35k level after 4 months.

Major activity was seen in Cement sector with 34.6 million shares, followed by Banks (20.7 million) and Engineering (18.6 million). Among scrips, FCCL led trading volumes with 11.2 million shares, followed by HASCOL (9.4 million) and BOP (8.8 million).

Sectors contributing to the performance include Banks (+273 points), Fertilizer (+135 points), E&P (+114 points), Cement (+90 points) and Power (+84 points).

Volumes increased from 157.1 million shares to 207.5 million shares (+32 percent DoD). Average traded value also increased by 31 percent to reach US$ 54.3 million as against US$ 41.5 million.

Stocks that contributed significantly to the volumes include FCCL, HASCOL, BOP, UNITY and KEL, which formed 22 percent of total volumes.

Stocks that contributed positively include HBL (+94 points), MCB (+74 points), HUBC (+73 points), ENGRO (+58 points) and LUCK (+49 points). Stocks that contributed negatively include ANL (-2 points), APL (-1 points), SCBPL (-1 points), GHGL (-1 points), and SRVI (-1 points).

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