A weekly review: Stocks surge by 1474.77 points until Middle East tensions escalate
The KSE-100 index raked in the astounding gain of 1474.77 points on a weekly basis.
KARACHI (Dunya News) – The Pakistan Stock Exchange (PSX) in the outgoing week witnessed massive overall spike in its gains as local and foreign investors rampaged all over the market with share prices of scores of companies, across the board, quickly hitting upper circuits.
The KSE-100 index raked in the astounding gain of 1474.77 points on a weekly basis.
Yesterday (Friday), the stocks closed mostly in the red with the KSE-100 index retreating by 157.46 points (0.37 per cent) and settling at 42,323.30. In line with regional peers, the investors were worried about escalating tensions in the Middle East after a U.S. airstrike in Baghdad airport that killed a top Iranian commander, according to dealers. Insurance companies were the major sellers of equity worth $2.09 million. But it was quickly absorbed by the individuals. The volume declined 22pc to 323m shares while the traded value fell 14pc to $94.8m.
On Thursday, the market was on fire as the benchmark KSE-100 share Index stormed past 42,000 level, and hit the record high of 42,480.76 points in around 16 months. The KSE-100 index gained 1,080.76 points (2.61 per cent) amid positive sentiments among investors.
On Wednesday, the first day of the year 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.
On Monday, the stocks gained 39.10 points (0.10 %), and the Index closed at 40,887.63 points. A total of 165,834,760 shares were traded, while the value of shares traded during the day stood at Rs6.636 billion. 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.
Last Friday, the stock market went into profit-booking and the KSE-100 index closed in the red by 279.26 points at 40,848.53. Mainly oil and gas marketing companies, exploration and production, power and cement sectors remained under pressure.
Overall, investors’ optimism continued as they saw the market back in the green after two earlier dismal years of negative returns.
The index was last seen trading above 41,000 points in February, 2019. So far, the market has regained over 13,000 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.
