Stock market records highest ever day-gain after federal capital’s lock-down called off

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Photo by Imran Gilani

Karachi

Pakistan’s stock market made a resounding comeback to record highest-ever day-gain in its history following Imran Khan’s announcement to call off his Dharna (protest), which was planned to lock down the federal capital on November 2.

‘’The market expected a positive outcome of today’s Supreme Court hearing on Panama Papers, thus the overall sentiment was positive since morning,’’ said Zeeshan Afzal, Director Research at Insight Securities.

In Tuesday’s hearing the Supreme Court decided to form a judicial commission in order to investigate the Panama Papers Scandal, which had brought Prime Minister Nawaz Sharif and his family members under public scrutiny for having offshore companies in foreign tax havens. Following the SC’s decision, Pakistan Tehreek-e-Insaaf’s chief called off his November 2 sit-in protest, which had shaved off nearly 1600 points from the local bourse within 10 days.

The peaceful end to the ongoing political unrest in Islamabad helped the bourse, which, on Tuesday, breached 40,000 level once gain to settle at 41,299.87 points, only a few hundred points below its all time high recorded on October 20. This is 3.52 percent or a significant 1,406 points higher than the opening position of 39,859.39. It is also the highest gain the market has ever witnessed in a single day, second only to that of March 31, 2015 when it gained 1306 points in a single session on the back of heavy foreign buying.

‘’The court’s decision [to probe the Panama Papers] led to a broad based rally across all sectors in today’s session,’’ said an analyst report by Intermarket Securities.

The Supreme Court’s decision coupled with PTI’s postponement of the capital lock-down escalated all sectors with 95 stocks hitting their upper circuits.

Keeping the previous day’s momentum on, K-Electric again stood out as the volume leader with as many as 41 million shares traded in the day while its share price appreciated by Rs0.27 to close at Rs9.60. The power distribution company was followed by Bank of Punjab with 28 million shares, up Rs1 and First Dawood Investment Bank with 22.5 million shares, up Rs0.97 from last day’s tally.

Market Leaders for the day were Habib Bank Limited (+3.96 percent), Lucky Cement (+5 percent), United Bank Limited (+4.23 percent), Engro (+4.94 percent) and Pakistan Petroleum Limited (+5 percent). The aforementioned stocks contributed 415 points to the KSE-100 Index.

Autos staged one of the strongest comebacks in recent days with Pak Suzuki Motor Company, Toyota Indus, Honda Atlas Cars Pakistan, Ghandhara Industries Limited and Ghandhara Nisan Limited’s share price appreciating by 5 percent simultaneously to close at their upper limits.

Cement sector also bounced back strongly with DG Khan Cement’s share value increasing 4.63 percent, Lucky Cement’s 5 percent, Maple Leaf Cement Factory’s 5 percent, Cherat Cement Company Limited’s 5 percent and Fauji Cement Company Limited’s 3.98 percents.

Exploration and Production sector was also back in the green from its the recent decline, which was caused by lower crude oil prices. Oil and Gas Development Company’s share price appreciated by 1.77 percent, Pakistan Oil Fields Limited by 3.91 percent and Pakistan Petroleum Limited by 5 percent thus all ending in the green.

‘’Banking sector staged a comeback after Standard & Poor’s improved Pakistan’s long-term credit rating,” said IMS report adding an above street consensus Inflation for the month of October also contributed to the gains in banking sector — the CPI for October clocked in at 4.21 percent against market consensus of 3.98 per cent.

Market participation jumped to 207 million shares against 131 million of the previous day. Daily traded value surged to a whopping $124.2 million compared to $53.3 million in the previous session. Share price of 356 stocks went up, 43 declined and 13 stock’s price remain unchanged till the end of the day.

‘’Aiming for its recent all-time high of 41,688.57, we expect the upbeat sentiment to push the 100 index into new territory,’’ concluded the report.