A final-hour buying spree at the Pakistan Stock Exchange (PSX) pushed the benchmark KSE-100 index to settle with an increase of nearly 1,100 points during trading on Wednesday.
During the day, clarity on the political front regarding the formation of a new government bolstered market sentiment at the bourse.
Mohammed Sohail, CEO of Topline Securities, in a note, earlier during the day, said early-session buying rally came “after news that two political parties reached agreement for government formation.”
In the second half of the trading session, the market resorted to profit-taking, taking the benchmark to an intra-day low of 60,906.98.
However, last-hour buying again pushed the benchmark index higher, helping it settle at 61,559.16, an increase of 1,094.91 points or 1.81%.
Earlier, after several rounds of consultations, major political parties — Pakistan Muslim League-Nawaz (PML-N) and Pakistan Peoples Party (PPP) — Tuesday, reached an agreement to form a coalition government in the Centre. The agreement comes nearly two weeks after general elections were held in the country.
As per reports, the understanding was reached in a meeting of the senior leadership of the two parties, including PML-N president Shehbaz Sharif and PPP chairman Bilawal Bhutto Zardari followed by a joint presser, which was also joined by PPP co-chairman Asif Ali Zardari and other senior leaders of the two parties late on Tuesday.
As per the understanding, Shehbaz Sharif will be the joint candidate for the prime minister and Asif Ali Zardari for the office of the president of Pakistan while the cabinet members will be finalised through consultations.
“We, the PPP and PML-N, have achieved the required number and we are in a position to form the government,” Bilawal told the presser.
Globally, Asian stocks eased on Wednesday as diminishing expectations of early interest rate cuts from the Federal Reserve sapped risk appetite, with investors looking to the minutes of the U.S. central bank’s last meeting for clues on the policy outlook.
MSCI’s broadest index of Asia-Pacific shares outside Japan, was 0.09% lower on Wednesday. Japan’s Nikkei eased 0.21%, having stuttered in the last few days within sight of the all-time high set in 1989.
China stocks were mixed in early trading, a day after the biggest-ever reduction in the nation’s benchmark mortgage rate as authorities stepped up efforts to prop up the struggling property market.
On Tuesday, despite initial gains, the PSX ended the trading session on a flat note, with KSE-100 settling at 60,464.24 with a gain of only 4.49 points or 0.01%.
Meanwhile, the Pakistani rupee inched up against the US dollar, appreciating 0.03% in the inter-bank market on Wednesday. At close, the local unit settled at 279.50, a gain of Re0.07 against the greenback, as per the State Bank of Pakistan.
Volume on the all-share index decreased to 362.77 million from 364.44 million a session ago.
The value of shares increased to Rs12.5 billion from Rs11 billion in the previous session.
B.O.Punjab was the volume leader with 35.44 million shares, followed by K-Electric Ltd with 28.62 million shares, and WorldCall Telecom with 21.42 million shares.
Shares of 347 companies were traded on Wednesday, of which 242 registered an increase, 84 recorded a fall, while 21 remained unchanged.