Daily Times

Pakistan Stock Exchange (PSX) witnessed a glimpse of recovery on Tuesday, as benchmark kse-100 surged 230.84 points by the closing bell, to clock at 39,863.36 index level.

Market sentiments were spurred by Central bank’s Monetary Policy Committee (MPC) decision, which kept the policy rate unchanged i.e. at 7 percent, as it expected inflation for fiscal year 2021 (FY21) to fall within the previously announced range of 7-9%. Country’s central Bank has kept its key interest rate steady ever since it had slashed the policy rate to 7 percent in June from 13.25 percent earlier in the year.

Moreover, investors also welcomed the update on the resumption of the International Monterey Fund IMF program which was discussed during the MPC meeting. State Bank of Pakistan’s governor highlighted those technical discussions with the IMF are ongoing and major progress has been made on key sticking points such as electricity tariffs, taxation, etc.; the timing of the same remains a key sticking point.

During the session, the exploration & production stocks stage a comeback, due to consistently rising global oil prices, whereas banks and oil & gas marketing companies also traded positively for the most part of the session. However, cement stocks saw selling pressure earlier in the day, primarily due to the anticipation of slow growth in cement despatches. However, renewed buying interest was seen in the sector towards the end, after value hunters cherry-picked undervalued stocks which lifted the index over 200 points.

However, the index continued to witness an extended dry spell of volumes, as equity investors remain shy of entering the market following rising uncertainty surrounding Covid-19. Investors closely followed the developments around the second wave of the virus as on Tuesday, Federal Minister for Planning, Development and Special Initiatives Asad Umar warned that Pakistan will be pushed back to a similar situation that it faced in June if coronavirus standard operating procedures (SOPs) are not followed. The ministers’ statement followed Prime Minister Imran Khan’s stance on Sunday, who said the opposition alliance PDM would be responsible for consequences if they continued with their public gatherings despite a COVID-19 spike, and the government was forced to go for a lockdown.

On Monday, the volume at Kse-100 index diminished from 117.94 million shares recorded in the previous session to 105.95 million shares, while the overall market volumes were recorded at around 174.72 million shares, decreasing from the previous session’s volumes of 195.47 million shares.

The volume chart was led by Unity Foods Limited followed by Maple Leaf Cement Factory Limited and TRG Pakistan Limited. The scrips exchanged 19.01 million, 14.52 million and 12.67 million shares, respectively.

Sectors that lifted the index were Oil & Gas Exploration Companies with 67 points, Commercial Banks with 41 points, Fertilizer with 26 points, Technology & Communication with 22 points and Oil & Gas Marketing Companies with 18 points. Among the scrips, most points added to the index was by Pakistan Oilfields Limited which contributed 23 points followed by Dawood Hercules Corporation Limited with 18 points, Mari Petroleum Company Limited with 17 points, Lucky Cement Limited with 16 points and Oil & Gas Development Company Limited with 16 points.

However, the sectors which bumped the index were Insurance with 4 points, Chemical with 3 points, Engineering with 3 points, Food & Personal Care Products with 3 points and Power Generation & Distribution with 3 points. Among the scrips, most points taken off the index was by Colgate Palmolive (Pakistan) Limited which stripped the index of 6 points followed by Indus Motor Company Limited with 6 points, DG Khan Cement with 5 points, Engro Corporation Limited with 4 points and Maple Leaf Cement Factory Limited with 4 points.

Global markets: Vaccine optimism, Biden transition progress lifts stocks

Global witness sharp rally on Tuesday as markets react to effective coronavirus vaccines, which is expected to be rolled out soon. Bio tech companies Pfizer and BioNTech last week had already applied for an emergency use authorization from the U.S. Food and Drug Administration for their coronavirus vaccine. Meanwhile, British pharmaceutical giant AstraZeneca on Monday said an interim analysis of clinical trials showed its coronavirus vaccine has an average efficacy of 70% in protecting against the virus.

Global markets also welcomed the news of U.S president Donald Trump’s administration, which gave green light to proceed with Biden transition. On Tuesday, General Services Administration chief Emily Murphy told President-elect Joe Biden that the Trump administration is making federal resources available for his transition into office.

In Asia, Investors followed positive developments in Washington and Covid-19 vaccine, which lifted stocks across the region. Among the regional markets, Japan’s benchmark index Nikkei 225led the gains and jumped 2.5% to close at 26,165.59, followed by South Korea’s Kospi index which rose 0.58% to finish its trading day at 2,617.76. Hong Kong’s Hang Seng index also followed the trend and gained 0.30% by the session’s closing. However, Chinese stocks bucked the trend as Benchmark index Shanghai composite slipped 0.34% to about 3,402.82

European stocks markets also followed the global trend and witness fresh rally. The pan-European Stoxx 600 gained 0.7% by mid-afternoon trade, oil and gas stocks also bounced back 4.2% to lead gains as almost all sectors and major bourses entered positive territory. Among the regional markets, UK’s FTSE-100 index led the gains and jumped 1.45%, followed by CAC-40 in France and Germany’s DAX, which surged 1.24% and 1.17% respectively.

In U.S Wall Street celebrated the most awaited news of smooth transition of the presidency and an end to political uncertainty. Trump administrations’ move to begin the transition process brought relief to investors, which lifted the stocks across the board. During the early trading hours, 30-stock Dow Jones Industrial Average traded higher by 400 points, and hit an all-time intraday high. The S&P 500 also jumped nearly 1 % while the tech heavy Nasdaq Composite advanced 0.3%. Among the major gainers, Boeing and Chevron stocks rose 4.3% and 3.7%, respectively, to lead the Dow higher, while Energy was the best-performing sector in the S&P 500, rising 4.4%.