Stocks rally 1,165 points as US-Iran tensions ease
KARACHI: Investors who had run to take cover following Iran`s missile attacks on US bases in Iraq on Wednesday, rushed back to the market on Thursday after a highly unexpected reconciliatory code struck by US President Donald Trump in his speech the night before.[TOP]
As soon as market opened, the KSE-100 index immediately propelled 640 points and there was no looking back. The market displayed a spectacular rally during the day that saw the index roar past the 42,000 level and settled with massive gains of 1,165.5 points (2.82 per cent) the highest single day rise in eight months, since May 22, 2019.
The issue that bolstered investors` sentiment was that President Trump deescalated the nerve-wrenching tensions that were felt across the globe which though threatened addidonalsancdons on Iran but made no mention of military retaliation.
On the local political scene, the passage of three PakistanServices (Amendment) Bills concerning the tenure of services chiefs of Army, Air Force and the Navy without any resistance from two major political parties in the opposition also brought in a rare breeze of fresh air into domestic politics.
As the war drums fell silent, most global market put up a positive performance and Pakistan`s mar-ket followed suit. The rally was led by foreign investors who bought stocks worth $2.89 million on Thursday, taking the three-day exposure in Pakistani stocks to $5.89m.
With scant negative news flow, the market was back on its earlier northbound journey. On the economic side, the persistent increase in foreign exchange reservestouched $11.5 billion; the second International Monetary Fund tranche was released and the lower-thanconsensus expectation of consumer price index inflation all pointed to some semblance of economy getting on tracks.
The cut in profit rates on all National Saving Schemes, following the decline in bond yields wastaken as a positive development for the market as it raised hopes of inflows from fixed-income securities to the equity market.
The market also displayed appetite for Exchange Traded Funds (ETFs) new product to hit market in a long time.
Traded volumes increased29pcovertheprevious day to 362.5m shares.Traded value also rose by 18pc to reach $88.8m from $75.4m on Wednesday.
Stocks that contributed significantly to the volumes included Bank of Punjab, K-Electric, Unity Foods, TRG Pakistan and Maple Lead Cement Factory, which formed 37pc of total volumes.
Sectors that were major movers included banks up 335 points, exploration and production 135 points, fertiliser 129 points, cement 115 points and power 108 points.
Scrip-wise, Lucky Cement was up 4.5pc, D. G.
Khan Cement 5.0pc, Maple Leaf Cement Factory 5.0pc, Pioneer Cement 5.0pc, National Bank of Pakistan 5.0pc, Habib Bank Ltd 4.7pc, Bank of Punjab 6.4pc and MCB Bank 2.4pc all generatedposidve returns.
Other leading gainers were Pakistan Petroleum Ltd 3.6pc, Hub Power Company 3.8pc, Engro Corporation 2.0pc, Fauij Fertiliser Company 2.9pc, Pakistan State Oil 4.4pc and Mari Petroleum 3.6pc.
Against just 42 losers, as many as 325 shares gained values out of 381 active scrips, with dozens hitting their upper circuits.