Stock market posts 295-point recovery

KARACHI –  Stock market showed recovery on Friday amid subdued noise over geopolitical tension. The benchmark 100-share index rallied by 295 points and closed at 39,080 points.

Mid-session pressure remained on concerns for UN body report indicating economic and exchange risk facing Pakistan, impacting rupee parity and inviting rupee depreciation.

Receipt of $2.5b Eurobond and Sukuk issues supporting dwindling FX reserves and surging current account deficit, report on surging fertilizers, auto and cement sales in Nov 17 and rising local cement prices played a catalyst role in bullish close, said analyst Ahsan Mehanti.

Weak bullish momentum was witnessed on news of depreciating PKR against the greenback in the inter-bank market. PKR/US$ parity shot up to 109-110 levels from previous day’s closing of 105. Depreciation of the currency was seen as a positive sign for the equity market, as over 25% of market capitalization directly benefits from PKR depreciation where E&Ps, IPPs, textiles and IT-related companies stood out as major beneficiaries. State Bank took notice regarding depreciating rupee and after the intervention dollar price came down again to settle at around 105.80, commented dealer at JS Global. Following this, most of the gains, witnessed earlier in the day, reversed towards the end of the session.

Today’s major leaders at the bourse were MTL (up 1.5%), POL (2.5%), PPL (2.6%) and ENGRO (2.4%) whereas major laggards were INDU (down 2.9%), NRL (3.0%), PSMC (1.5%) and PKGS (1.3%). In the E&Ps sector, POL (up 2.5%) and PPL (2.6%) and OGDC (1.3%) rallied as the crude prices remained stable amidst recent decision by OPEC to keep supply cuts intact and signs of PKR devaluation in the open market.

Rally was witnessed in the banking sector as well, as the value buyers showed jubilance after witnessing significant battering in the past few weeks. UBL (up 3.0%), HBL (2.3%) and MCB (1.8%) were the major leaders of the aforementioned sector. Traded volumes plummeted by 8.4% DoD to 150m shares while value traded dropped to $68m.

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