KARACHI: The stock market turned around and notched up gains after staying in the red in the past four sessions.
Investors had mixed sentiments at the start of trading in the morning. The increase in the KSE-100 index was mainly supported by the data of remittances from overseas Pakistanis, which surged 12% in first seven months of FY19, and improvement in trade deficit, which narrowed 10% to $19.3 billion.
Moreover, the Saudi crown prince is likely to sign $12 billion worth of memoranda of understanding with Pakistan and the Pakistan Banao Certificates fetched $1 million in two weeks. These positive developments raised investors’ confidence, encouraging them to opt for fresh positions in the market.
The cement sector remained in the limelight due to declining coal prices and the announcement that Mohmand Dam would be completed in five years. The banking sector, however, came under pressure owing to a Moody’s report, which changed Pakistan’s banking system outlook to negative.
At the end of trading, the benchmark KSE 100-share Index recorded an increase of 269.75 points, or 0.67%, to settle at 40,596.28.
Elixir Securities’ analyst Murtaza Jafar said after posting losses over the past four trading days, the equities recovered ground with the benchmark index going up 270 points to close at 40,596, led by blue chips from cement and exploration and production sectors.
He said after a sideways opening, the investors embarked on a roller coaster ride as the index oscillated in both directions for most part of the day, but strong buying in Lucky Cement (+3.81%), DG Khan Cement (+4.95%) and Cherat Cement (+4.77%) changed the scenario later.
Reported foreign buying interest in exploration and production stocks, including Oil and Gas Development Company (+2.41%) and Pakistan Oilfields (+2.38%), contributed 78 points to the day’s gains.
The analyst said the volumes chart was dominated by retail and speculative names including Azgard Nine (-1.08%), K-Electric (+4.33%), Unity Foods (-3.24%) and Pak Elektron (+1.22%). The four stocks together contributed 55 million shares or 33% to the total traded volumes in the regular market.
“Going forward, we expect the market to resume its upside to 40,800-41,000 levels while a break will lead to a revisit to previous highs of 41,500-700,” he added.
Overall, trading volumes increased to 165.1 million shares compared with Monday’s tally of 134.4 million. The value of shares traded during the day was Rs6.5 billion.
Shares of 340 companies were traded. At the end of the day, 178 stocks closed higher, 143 declined and 19 remained unchanged.
Azgard Nine was the volume leader with 27.6 million shares, losing Rs0.16 to close at Rs14.68. It was followed by K-Electric with 12.7 million shares, gaining Rs0.27 to close at Rs6.51 and Unity Foods with 8.4 million shares, losing Rs0.75 to close at Rs22.41.
Foreign institutional investors were net buyers of Rs494.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.