Pakistan stock Exchange benchmark KSE-100 index sustained its gains on Wednesday on the back of oil price jump, which recovered after plummeting for consecutive two days. Investors’ sentiments were also picked up by easing lockdowns which echoed the sentiments at global stock markets as well, as major bourses advanced.
KSE-100 index crossed 33, 000 mark to clock at 33,158 points after gaining 605 points or 1.86%.The index remained positive throughout the session today touching an intraday high of 33,158.84 and an intraday low of 32,553.39.Total volume traded for the index was 110.97 million shares down from 124.87 million shares traded in the previous session.All Share Volume decreased by 18.94 Million to 140.47 Million Shares. Market Cap increased by Rs.95.93 Billion.
Major stocks including petroleum , fertilizers and cement attracted fresh rally due to multiple factors. Oil stocks was lifted after global oil prices recovered.U.S oil prices jumped, trimming some of this week’s losses after U.S stockpiles rose less than expected and on expectations that demand will increase as some European countries and United States cities moved to ease s lockdowns.U.S West Texas Intermediate) crude futures climbed to a high of $14.40 a barrel and were up 15.4%, or $1.90, at $14.24, paring a 27 percent plunge over the first two days of this week.Meanwhile, international benchmark Brent crude futures rose 4.6%, or 93 cents to $21.39 per barrel.
In addition to this, investors’ confidence further improved on the back of the government’s consideration of reduction in fertilizer prices which is expected to be targeted through direct subsidy to farmers. Policymakers are also eyeing a reduction in electricity tariff and direct subsidy to SMEs in the form of a waiver on electricity bills which will also encourage economic activity. Meanwhile, fresh interest in the equities market is backed up by reduction in profit rates on National Savings Certificate, high yield stocks have become attractive According to a notification issued last week profit rate has been cut by 1.86% to 8.54% on defense certificate, and by 1.92% to 10.32% on behbood and pension certificates.
Additionally, market sentiments were lifted following speculations that State Bank of Pakistan is set to cut its interest rate in another round of stimulus plan to fight off economic fallout of covid-19.Pakistan’s central bank has aggressively cut the benchmark interest rate by 425 basis points in between March and April.Currently, the key policy rate stands at a 17-month low of 9%.
Sectors that lifted the indexincluded Oil & Gas Exploration Companies with 177 points, Power Generation & Distribution with 120 points, Fertilizer with 85 points, Cement with 67 points and Investment Banks with 33 points. Among the companies, most points added most points added to the index was by Hub Power Company Limited which contributed 116 points followed by Oil &Gas Development Company Limited with 61 points, Pakistan Oilfields Limited with 50 points, Fauji Fertilizer Company Limited with 45 points and Lucky Cement Limited with 39 points.
However, Sectors that added pressure to the index included Commercial Banks deducting 22 points, followed by Real Estate Investment Trust with 2 points, Transport with 1 point, Refinery with 1 point and Vanaspati& Allied Industries with 1 point.The most points taken off the index was by Bank Al HabibLimited which stripped the index of 35 points followed by HabibBank Limited with 12 points, NESTLE with 8 points.
Global Markets: Major benchmarks in Europe jumped on Wednesday after Gilead Sciences claimed it was seeing “positive data” from trials of its drug remdesivir as a coronavirus treatment. Investor sentiment was lifted after Gilead said in a statement on Wednesday it was “aware of positive data emerging from the National Institute of Allergy and Infectious Diseases’ study of the investigational antiviral remdesivir for the treatment of Covid-19.”However investors remained muted as they awaited the outcome of the Fed’s two-day policy meeting that concludes today, although no action is expected from the central bank.
Major stock markets including FTSE-100 in England, German DAX and French CAC-40 traded higher. The bourses advanced despite negative Euro zone economic data which showed, region’s confidence suffered its sharpest ever decline in April, according to a monthly European Commission survey published. Economic sentiment plunged to 67.0 in April from a downwardly-revised 94.2 in March.
Meanwhile, Asian Stocks edged higher .Mainland Chinese stocks were mixed on the day, with the Shanghai composite up 0.44% to about 2,822.44 while the Shenzhen composite dipped 0.105% to around 1,730.74. Hong Kong’s Hang Seng index advanced 0.28%, as of its final hour of trading.South Korea’s Kospi gained 0.70% to close at 1,947.56. In U.S Wall Street also posted another day of gains despite U.S economic data revealed, economic activity witnessed a sharp drop. Commerce department figures revealed, that the longest-ever US economic expansion is officially over. U.S gross domestic product fell at a 4.8% annualized rate in the first quarter. The dip in GDP surpassed Economists’ forecasts that the GDP will fall by a 3.8% annualized rate in the first quarter.The slump from January through March reflects the sharp economic impact of country-wide shutdowns to curb the spread of Covid-19.The GDP contraction has ended the longest-ever economic expansion that took place in the U.S after the Great Recession of 2007-2009. During the record expansion, the unemployment rate fell to a 50-year low of 3.5%, and the US economy added jobs for 113 months in a row. But, In just five weeks, 26 million Americans have filed for unemployment claims, effectively erasing more than a decade of job creation in just over a month.
