Stock market regains control, 100 index gains 417 points

KARACHI: After a dismal day yesterday which saw the stock market plunge below the 40,000 level, the indices witnessed a positive trajectory on Tuesday over an easing in economic challenges.

The benchmark KSE 100 index increased by 417.46 points (1.05 percent) to eventually close by 39,714.46 points. The indices registered its highest level at 39,985.96 points but could not cross the 40,000 level which it lost yesterday before trading was suspended. The total volume of scripts was 115.956 million valued at Rs5.269 billion.

Meanwhile, the lower KSE 30 index bench also witnessed an increase of 198.31 points (1.10%) to close at 18,288.96 points. The total volume of shares was 63.898 million. The share prices of top advancers witnessed an increase in share price notably Hascol (4.72%), Unity (3.83%), TRG (2.84), MLCF (5.62%), followed by Bank of Punjab (2.40%), DGKC (3.03%) and PIAA (7.32%).

Muhammad Farhan, Senior Equity Sales at M.M. Securities, expressed optimism and said that the 40,000 points barrier will likely to be crossed this week. If this goes forward, then the stock market is likely to continue with the upward trajectory for the upcoming week.

The stock market was affected by the decision of the Economic Coordination Committee (ECC) of the federal cabinet to ban the export of sugar. The meeting chaired by Finance Adviser Hafeez Shaikh has expressed satisfaction over the sugar supplies in the country. It observed that sugar prices were rising in the domestic market, and decided to ban exports to control prices.

Mr Farhan said that federal cabinet meeting being chaired by Prime Minister Imran Khan to discuss the rising inflation in the country will have a significant impact on the stock market. The prime minister has expressed concerns over the rising prices and vowed to provide relief. The Consumer Price Index (CPI) has increased to 14.56 percent this month raising alarm bells among the economic teams.

The market was also relieved after rumours regarding the ouster of Finance Adviser Hafeez Shaikh and Governor State Bank of Pakistan (SBP) Dr Reza Baqir were refuted. However, an IMF delegation is currently in Islamabad reviewing the economic performance. The talks will conclude on February 13 this week leading to a tax regime, and how this will affect the stock market will only be known afterward, Farhan said.