Market watch: KSE-100 takes U-turn, rises 574 points

Benchmark index increases 1.51% to settle at 38,585.66

KARACHI: Following a three-day bearish spell and cumulative loss of nearly 1,290 points, the KSE-100 index took a U-turn and climbed 574 points on Friday on the back of an optimistic economic outlook by a rating agency and arrival of financial assistance from Saudi Arabia.

The gain partially offset the hefty losses endured during the week. Earlier, trading began on a positive note and the index remained on an upward trajectory throughout the day with a few occasional falls. All index-heavy sectors were in the black, leading the bourse to finish the day near the 38,600-point mark.

Moody's negative report, scarcity of gas and fall in foreign currency reserves dented investor sentiments somewhat and prevented the market from rising any further.

At the end of trading, the benchmark KSE 100-share Index recorded an increase of 574.03 points or 1.51% to settle at 38,585.66.



Arif Habib Limited, in its report, stated that after posting back-to-back losses in the past couple of sessions, the index rose by around 600 points.

"Sectors contributing positively to the index both in terms of price and volume gains include bank, chemical and cement," it said. "Habib Bank, United Bank, Lucky Cement, DG Khan Cement and Engro contributed positively and were among the index drivers."

Although trading volumes remained lower at less than 100 million shares, investors placed bets on anticipation of fresh injection of funds by government institutions.

The news about Fitch downgrading Pakistan's rating to B- with a stable outlook failed to cause a stir in the market, it said.



Stocks that contributed positively included Engro (80 points), Pakistan Petroleum (51 points) and United Bank (42 points). Stocks that contributed negatively included Searle (6 points), Thal Limited (5 points) and Jubilee Life (3 points).

JS Global analyst Danish Ladhani said the market started off sideways but later rose on reports that the State Bank of Pakistan (SBP) had received another $1 billion in assistance from Saudi Arabia.

Moreover, he said, the Asian Development Bank (ADB) would provide $284 million for the power transmission network while the lender also extended its Country Operation Business Plan to 2019-21 with proposed lending of $7.5 billion.

Commercial banks, energy and fertiliser stocks were the major movers. Engro (+4.1%), Pakistan Petroleum (+2.8%), United Bank (+2.7%), Habib Bank (+2%), PSO (+3%), Hubco (+2.3%), Pakistan Oilfields (+0.9%) and Fauji Fertiliser (+1.1%) cumulatively contributed 292 points to the index.

"We expect the market to remain volatile on the back of economic and political uncertainty," the analyst added.

Overall, trading volumes increased to 98.5 million shares compared with Thursday's tally of 84.2 million. The value of shares traded during the day was Rs4.67 billion.

Shares of 336 companies were traded. At the end of the day, 245 stocks closed higher, 67 declined and 24 remained unchanged.

The Bank of Punjab was the volume leader with 11.1 million shares, gaining Rs0.16 to close at Rs12.74. It was followed by Lotte Chemical with 6.8 million shares, gaining Rs0.45 to close at Rs18.01 and Pak Elektron with 4.8 million shares, gaining Rs0.41 to close at Rs25.4.

Foreign institutional investors were net sellers of Rs355.9 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.