Stock market gains 252 points on rate cut hopes

Stock market gains 252 points on rate cut hopes

The stock market surged by 252 points on Friday, driven by optimism surrounding a potential interest rate cut in response to the latest inflation figures.

The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) closed at 30,467 points, up from 30,215 points, reflecting a buoyant market sentiment.

Analysts at Arif Habib Limited noted that the trading day at the stock market, abbreviated to honor Defence Day and show solidarity with Kashmir, concluded on a high note. Despite early selling pressure at the stock market caused by rumors of a rights issue from cement sector companies, the stock market sentiment improved later in the session, buoyed by the prospects of an interest rate cut and the release of the latest Consumer Price Index (CPI) data.

The banking and exploration & production (E&P) sectors were the primary contributors to the index’s rise. Habib Bank Limited (HBL) hit the upper circuit, while Oil & Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) experienced significant price spikes, marking their highest levels in recent times at the stock market.

The cement sector led the volumes chart with 12.1 million shares traded, followed by the E&P sector with 6.1 million shares and the technology sector with 6 million shares at the stock market. Among individual stocks, Maple Leaf Cement Factory (MLCF) topped the volumes with 7.1 million shares, followed by WorldCall Telecom Limited (WTL) with 4.6 million shares and OGDC with 4.2 million shares.

Sector-wise, the banking sector contributed the most to the performance, adding 108 points, followed by E&P with 72 points, power with 48 points, food with 12 points, chemicals with 11 points, and cement which detracted 14 points at the stock market.

Overall trading volumes at the stock market saw a significant decline, dropping from 146.5 million shares to 48.2 million shares, marking a 67 percent day-on-day decrease. Similarly, the average traded value fell by 52 percent, reaching $15.5 million compared to $32.7 million on the previous trading day.

Key stocks that contributed to the volume included MLCF, WTL, OGDC, D.G. Khan Cement Company (DGKC), and Pak Elektron Limited (PAEL), collectively accounting for 44 percent of the total trading volume.

Positive contributors to the index included HBL (+78 points), Hub Power Company (HUBC) (+47 points), OGDC (+45 points), PPL (+23 points), and Engro Fertilizers Limited (EFERT) (+11 points). Conversely, stocks such as Engro Corporation (ENGRO) (-10 points), Lucky Cement (LUCK) (-8 points), Kohinoor Textile Mills Limited (KTML) (-4 points), Indus Motor Company (INDU) (-4 points), and Fauji Fertilizer Company (FFC) (-4 points) weighed down the index.

The market’s performance reflects investor optimism about the economic outlook, particularly the anticipated interest rate cut, which is expected to stimulate economic activity. As the market looks ahead, the focus remains on inflation trends and monetary policy decisions that will shape the future trading landscape.