Stock market gains 230 points on surprise rate cut

KARACHI: The stock market gained 230 points on Friday after the central bank announced a surprise cut in interest rate a day earlier.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 33,939 points as against 33,709 points showing an increase of 230 points.

Analysts at Arif Habib Limited said that the surprise rate cut by SBP post market yesterday, had the market open +319 points with 3.8 million shares traded on the opening bell.

Cyclicals (Cement & Steel), which have had high leverage ratios in the past couple years were largely the beneficiaries of this rate cut and therefore reflected the same positivity in the market as well.

MLCF and DGKC did the most volumes in the Cement sector stocks. E&P sector that could have benefited from the overnight bounce back in international crude prices failed to reciprocate and had a muted response during the session.

Banking sector stocks, on the other hand, declined further as a result of Policy rate cut but couldn’t place significant volumes on the bourse.

Today, also happened to be the last day of the roll-over week but didn’t cause much of an impact on stock prices.

Cement sector led the volumes with 43.9M shares, followed by Technology (23.8 million) and Refinery (14.4 million). MLCF topped the volumes with 15.2 million shares, followed by PRLR (13 million) and DGKC (12.6 million).

Sectors contributing to the performance include Fertilizer (+109 points), Cement (+93 points), Power (+43 points), O&GMCs (+15 points) and Pharma (+13 points).

Volumes increased from 168.4 million shares to 198.2 million shares (+17 percent DoD). Average traded value also increased by 28 percent to reach US$ 40.5 million as against US$ 31.5 million.

Stocks that contributed significantly to the volumes include MLCF, PRLR1, DGKC, UNITY and TRG, which formed 31 percent of total volumes.

Stocks that contributed positively to the index include FFC (+57 points), HUBC (+43 points), ENGRO (+40 points), LUCK (+31 points) and DGKC (+26 points). Stocks that contributed negatively include BAFL (-20 points), HBL (-18 points), DAWH (-16 points), UBL (-12 points), and MEBL (-11 points).

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