KARACHI: Stocks were on fire at the PSX on Wednesday where the KSE-100 index passed several landmarks as the news of Pakistan upgrade to MSCI Emerging Market from MSCI Frontier Market Index gave a big boost to investor sentiments.
Breaking all resistance levels the KSE-100 index opened with a gain of 1,091 points pushing the market to levels never tested before. The benchmark shot past the 38,500 points mark with a massive gain of 1,042 points (2.7 per cent), highest single day rise since March 31, 2015 when index had gained 1,306 (4.5pc). The KSE-100 index closed at an all-time high of 38,559.
Volumes rose by 70pc to 243m shares on Wednesday and traded value amounted to Rs19bn, more than twice the previous day. Among local participants, mutual funds bought stocks worth $19.24m, while banks and individuals took profit at higher levels.
The investors’ exuberance was based on anticipation of foreign inflows, which analysts calculated could be between $200 to $600m as a result of Pakistan’s reclassification to the MSCI EM index.
Buying interest was mainly observed in 9 scrips eligible for inclusion in MSCI EM, which included OGDC, HBL, UBL, MCB Bank, Hub Power Company, Fauji Fertiliser, Engro Corporation, PSO and Lucky Cement all hit their ‘upper circuits’ right from the start. Together they contributed 633 points to the day’s rally.
Moreover, stocks (a total of 27 constituents) eligible for inclusion in MSCI Investible Market Index (IMI) also attracted investor attention. Apart from the MSCI announcement, autos and fertilisers maintained their positive momentum on the back of measures announced in the recent Punjab budget.