Stocks rally ahead of monetary decision
KARACHI: The stock market staged a robust rally ahead of Monday’s anticipated interest rate cut, helping the benchmark KSE 100 index snap its losing streak triggered by growing political noise last week.
Contrary to last week’s trend, Topline Securities Ltd noted in its market report that equities initiated the week on a bullish note ahead of the State Bank of Pakistan’s Monetary Policy Committee meeting, which was scheduled to be announced in the evening.
The index witnessed a positive momentum almost throughout the day.
Blue-chip stocks witnessed across-the-board buying, as most analysts anticipated a 100-150-bps cut in the SBP policy rate due to slowing inflation and improved macroeconomic indicators.
United Bank, Fauji Fertiliser, Pakistan Oilfield, Oil and Gas Development Company, and MCB Bank cumulatively added 452 points to the index during the session. Conversely, Hub Power, Engro Corporation, and Habib Bank saw some profit-taking wiped out 84 points.
Ahsan Mehanti of Arif Habib Corporation said stocks closed sharply higher amid a Fitch Ratings upgrade, likely stabilising the rupee and improving foreign inflows.
He said investor expectations for an SBP policy rate cut and hopes for Moody’s to raise its ratings on new government initiatives played a catalyst role in the bullish close.
As a result, the benchmark index hit an intraday high of 79,055.99 points and a low of 78,016.30. However, the index settled at 78,827.74 after adding 798.23 points or 1.02 per cent on a day-on-day basis.
The overall trading volume rose 33.32pc to 371.08 million shares. The traded value also surged by 64.83pc to Rs19.15bn on a day-on-day basis.
Stocks contributing significantly to the traded volume included Waves Home App (27.93m shares), Al Shaheer Corp (15.54m shares), Dewan Farooque (14.27m shares), Fauji Cement (12.76m shares) and WorldCall Telecom (12.31m shares).
The shares registering the most significant increases in their share prices in absolute terms were Unilever Foods (Rs139.96), Sazgar Engineering Works Ltd (Rs104.33), Nestle Pakistan (Rs49.93), Murree Brewery (Rs44.62) and Exide Pakistan (Rs44.54).
The companies registering significant decreases in their share prices in absolute terms were Rafhan Maize (Rs86.43), PIA Holding Ltd [B] (Rs40.96), Ismail Industries (Rs35.54), JDW Sugar Mills (Rs35.04) and Mehmood Textile (Rs30.35). Foreign investors remained net sellers as they offloaded shares worth $0.82m.
Published in Dawn, July 30th, 2024