Market watch: Stocks breach 41,000 barrier on healthy gains, activity

Benchmark KSE-100 Index rises 775.83 points to settle at 41,486.87

Our Correspondent January 02, 2018

KARACHI: The stock market, while continuing its positive momentum, made a strong advance on Tuesday as local investor interest across heavyweight sectors spurred buying and increased trading activity.

Closing in the green for the ninth consecutive session, the benchmark KSE-100 Index overcame early jitters due to a diplomatic spat between Pakistan and the US and rose steadily throughout the day.

At the end of trading, the benchmark KSE 100-share Index registered an increase of 775.83 points or 1.91% to settle at 41,486.87.

Elixir Securities' analyst Jawwad Abubakr said equities stretched their winning streak to the ninth straight trading session with the benchmark index finishing up 1.9% on healthy local activity as volumes of nearly 140 million shares were recorded on the KSE-100 Index.

The market experienced dull trading in initial hours as investors seemed perturbed about the escalating diplomatic tensions between the US and Pakistan after negative remarks from US President Donald Trump on the financial aid given to Pakistan.

However, as the day progressed, active buying from local institutional investors across major sectors changed the mood. Exploration and production and financial stocks led the rally while cement shares also contributed positive points to the KSE-100.

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On the corporate front, Pakistan Petroleum (+3.3%) notified the exchange of receiving government's approval to continue production under the Sui mining lease for a further period of six months effective December 1, 2017.

"(We) expect the KSE-100 Index to test 41,800/42,000 where we see a breather," Abubakr added.

JS Global analyst Maaz Mulla said Pakistan equities kicked off on a negative note due to Trump's tweet on Pakistan. However, the negativity could not last long as bulls entered and ruled the bourse, pushing the KSE-100 Index to an intra-day high of +856 points. It closed at 41,487 points.

Volumes also improved by 94% as 229 million shares were traded during the session. TRG Pakistan (-3.45%) led the volumes for the second consecutive day with more than 20 million shares changing hands.

A rally was witnessed in the banking sector where big banks boosted the index by 202 points. Habib Bank (+3.28%), MCB Bank (+2.70%), United Bank (+2.86%) and Bank Alfalah (+3.91%) closed higher.

The exploration and production sector recorded value buying as crude oil prices hovered at higher levels. Pakistan Petroleum (+2.77%), Oil and Gas Development Company (+2.23%) and Pakistan Oilfields (+2.65%) were major gainers of the sector.

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"Moving forward, we expect the positive trend to continue. Nonetheless, profit-taking can be witnessed in Wednesday's trading session to some extent. We recommend investors to buy in exploration and production and cement sectors to benefit from undervalued stock prices," Mulla said.

Overall, trading volumes increased to 229 million shares compared with Monday's tally of 118 million.

Shares of 381 companies were traded. At the end of the day, 235 stocks closed higher, 124 declined while 22 remained unchanged. The value of shares traded during the day was Rs10.5 billion.

TRG Pakistan was the volume leader with 20.7 million shares, losing Rs1.06 to close at Rs29.70. It was followed by K-Electric with 18.2 million shares, gaining Rs0.28 to close at Rs6.49 and Fauji Cement with 10.6 million shares, gaining Rs1.24 to close at Rs26.06.

Foreign institutional investors were net buyers of Rs271 million during the trading session, according to data compiled by the National Clearing Company of Pakistan.


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