Stock market climbs to highest in more than a year, gains 1,040 points in intraday trading

Yesterday, the first day of 2020, the KSE-100 Index accumulated massive gains of 664.92 points.

KARACHI (Dunya News) – The New Year 2020 has been strongly welcomed by the investors at the Pakistan Stock Exchange (PSX) as the benchmark KSE-100 share Index stormed past 42,000 level, and hit the record high of 42,440.37 points in more than a year on Thursday.

At 01.59pm, the KSE-100 Index reached 42,440.37 points with an increase of 1,040.37 or 2.51 percent amid positive sentiments among investors.

Yesterday, the first day of 2020, the KSE-100 Index accumulated massive gains of 664.92 points (1.63 percent) and closed above the 41,000-level at 41,400.

The index had opened at 40,735.08 and did not look back, surging to intraday high by 809 points. It had maintained the rising momentum that started in August last year and after wiping out all the red, provided a return of 10pc.

Investors’ optimism continued as they saw the market back in the green after two earlier dismal years of negative returns. The stocks had edged down on last working day of year 2019.

In the previous week, the stock market witnessed massive fluctuations as it began on a negative note on Monday when the KSE-100 share Index plunged by 824.70 points for profit-taking sessions before Christmas holiday amid absence of positive triggers but later on Thursday gained 799.47 points amid positive sentiments among traders.

The index was last seen trading above 41,000 points in February, 2019. So far, the market has regained over 11,000 points after hitting a five-year low at 28,671 points in August 2019.

Major developments earlier were, firstly, inflow of $1.3 billion from Asian Development Bank (ADB) for budgetary support and to address power sector reforms, secondly, worker remittances during November which stood at $1.8 billion (up 9.4 percent as compared to the same month last year), thirdly, forex reserves reaching $16 billion, up by 0.4 percent on a weekly basis, excluding tranche received from ADB, and fourthly, the latest PIB auction that saw 10-yr PIB cut off below 11 per cent that was last seen in Oct.18.

Improvement on the external front together with stability in the Pakistani Rupee was expected to reassure foreign investors.

Meanwhile, inflationary readings are set to touch peak in January 2020 (this month) with an imminent interest rate cut to follow, domestic investors remain jubilant as well, he said.

Previously, Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh had said the recent strong performance of Pakistan’s stock market was proof of “increasing investor confidence on stabilisation measures” employed by the Pakistan Tehreek-e-Insaf (PTI)-led government.

In a tweet, the premier’s aide had stated that the 14.9 per cent gain of the KSE-100 Index in November was the highest one-month return over the past six years.

“The KSE-100 index is up by 14.9% in November 2019, highest one month return after May 2013. Since 16 August 2019, the index increased by 36.6% (10,500 points),” Mr Shaikh had said.