PSX extends recovery to reclaim 166,000; SBP reserves rise

The Pakistan Stock Exchange extended its recovery on Thursday, with the benchmark KSE-100 index gaining 768.66 points, or 0.46 percent, to close at 166,186.17, as buyers returned to index-heavy stocks despite regional tensions.

The index traded between 165,613 and 166,877 during the day, Dawn and The Express Tribune reported, reclaiming the 166,000 level after a sharp fall earlier in the week over the KP emergency.

What drove the market

• Index movers: PTCL, up 7.62 percent, Fauji Fertiliser, Systems Ltd, Hub Power and Oil and Gas Development Company led the gains
• Sectors: commercial banks, technology, fertiliser and cement stocks gave strong support
• Oil: sentiment improved as Brent crude eased to around $104 to $105 a barrel, KTrade said
• Breadth: of 501 companies traded, 292 rose, 169 fell and 40 were unchanged

Trading volume fell to 517.6 million shares from 585.9 million, but the value of shares traded rose to Rs23.57 billion. Cnergyico PK led the volume chart with 62.8 million shares, gaining Rs0.09 to Rs12.80, followed by Pakistan Refinery with 43.4 million shares, up Rs4.57 to Rs103.76, and WorldCall Telecom with 19.5 million shares. Volume was down 11.65 percent on the day, while turnover rose 17.42 percent, Dawn reported.

According to Dawn, PTCL, Fauji Fertiliser, Systems Ltd, Hub Power, OGDC, Meezan Bank, Lucky Cement, Habib Bank, Pakistan Petroleum and United Bank together added 560 points to the index. Topline Securities said the market’s recovery was supported by selective buying in key index-heavy stocks after the recent correction, though sentiment stayed cautious over oil prices, the Middle East, domestic economic data and institutional fund flows. Arif Habib noted that, heading into the last session of the week, the index was still 0.54 percent lower for the week.

Resistance ahead

Arif Habib Limited said the index was approaching a key resistance zone of 167,000 to 168,000 points. Ali Najib, its deputy head of trading, said profit-taking in some stocks at higher levels trimmed gains.

Analysts said sustained gains above 166,000 pointed to a constructive near-term outlook, but noted that investors appeared ready to “sell on strength”. Escalating Houthi attacks on Saudi Arabia, targeting airports and oil facilities, have heightened regional security risks, Dawn reported.

“Going forward, investor focus is shifting towards the upcoming results season, with September-quarter result notices beginning to emerge. However, elevated international oil prices remain a key risk to market sentiment,” KTrade said.

Reserves edge up

The State Bank of Pakistan’s foreign exchange reserves rose by $16 million to $21.469 billion in the week ended October 9, the central bank said. The country’s total reserves stood at $26.863 billion, including $5.393 billion held by commercial banks.

The SBP has maintained record-high reserves since receiving $3 billion from the sale of Eurobonds, despite a rising trade deficit, Dawn reported.

Why it matters

After the shock of the KP emergency, the market has steadied and reserves remain at record levels. But with oil above $100 and the Gulf under fire, analysts say the recovery is fragile. Read our report on the market’s fall over the KP emergency.

This article draws on reporting by Dawn and The Express Tribune.