Moaaz Manzoor

The Pakistan Stock Exchange (PSX) closed January on a strong footing despite heightened volatility during the month, as the benchmark KSE-100 Index gained 10,120 points month-on-month to settle at 184,174. The index delivered returns of 5.8 percent in rupee terms and 5.9 percent in dollar terms, supported by improving liquidity conditions and ongoing corporate earnings announcements.

According to a monthly market review released by Arif Habib Limited (AHL), market sentiment remained broadly constructive during the month, even as intermittent geopolitical developments and earnings-related concerns triggered sharp intra-month swings. The absence of a widely anticipated policy rate cut did little to derail momentum, with the index managing to hold above the 184,000 level by month-end.

Trading activity strengthened notably in January. Average daily traded volumes rose 23 percent month-on-month to 1,087 million shares, while average traded value jumped 43 percent to $224 million, reflecting increased participation across major sectors. Sector-wise, Power led volumes with an average of 160 million shares, followed by Technology (148 million), Banks (113 million), Foods (72 million) and Investment Banks (69 million). On a scrip basis, K-Electric topped the volume charts with 108.2 million shares, followed by HASCOL (47.6 million), Bank of Punjab (42.5 million), Pakistan International Bulk Terminal (40.3 million) and WorldCall Telecom (35.4 million).

In terms of traded value, Banks dominated with $35 million, followed by Exploration and Production ($27 million), Power ($21 million), Cement ($18 million) and Fertilizer ($17 million). Among individual scrips, Fauji Fertilizer Company led value turnover at $11.7 million, followed by Pakistan Petroleum Limited ($10.7 million), Oil and Gas Development Company ($10.0 million), National Bank of Pakistan ($9.7 million) and Hub Power Company ($8.4 million).

Sector-wise contributions to the index were led by Banks, which added 5,002 points, followed by E&P (2,074 points), Investment Banks (832 points) and Automobile Assemblers (617 points). On the negative side, Technology shaved 423 points off the index, while Miscellaneous and Food sectors contributed declines of 221 points and 32 points, respectively. At the scrip level, UBL, PPL, OGDC, ENGROH and MEBL emerged as the top positive contributors, while SYS, PSEL, PIOC, FFC and DGKC weighed on index performance.

Performance across sectors remained mixed. Insurance surged 34 percent to lead sectoral gainers, followed by Auto Parts (19 percent), Refineries (18 percent), Automobile Assemblers (13 percent) and E&Ps (11 percent). Conversely, Textile Spinning and Synthetic sectors declined 8 percent each, while Miscellaneous and Textile Weaving fell 5 percent and 3 percent, respectively. On a scrip basis, JVDC, AICL, ATRL, SAZEW and ATLH posted gains ranging between 23 percent and 46 percent, while PSEL, HCAR, PIOC, HUMNL and SYS recorded negative returns during the month.

Commenting on the market’s performance, Waqas Ghani, Head of Research at JS Global Capital, said the PSX posted strong gains in January, with the KSE-100 Index rising 5.8 percent month-on-month, supported by sustained local inflows and record liquidity. He noted that the index touched a record high of 189,000 points before profit-taking emerged toward month-end amid US–Iran geopolitical tensions, closing near 184,000 points.

Ghani added that trading activity remained robust, with average daily volumes up 25 percent month-on-month and value traded at $224 million — the highest level since June 2008. He said banking stocks led gains on an unchanged policy rate and a 100-basis-point cut in the cash reserve ratio, despite selective corrections in stocks such as FFC.

Syed Zafar Abbas, Manager at Zahid Latif Khan Securities, said the final week of January coincided with the futures rollover, resulting in heightened volatility. He noted that the market came under sharp pressure during the week, at one point shedding nearly 6,000 points, before stabilising toward the close amid global uncertainty affecting commodities and cryptocurrencies.

Credit: INP-WealthPk