Market watch: Stocks gain ahead of PM’s meeting with US president

Benchmark index increases 125.78 points to settle at 32,584.55

KARACHI: The benchmark KSE-100 index closed higher on first trading session of the week as investors keenly awaited the outcome of Prime Minister Imran Khan’s meeting with US President Donald Trump, which might lead to better economic and diplomatic relations between Pakistan and the US.

The index shot up as soon as trading began, followed by oscillation between green and red zones. Many investors remained on the sidelines as traded volumes went down 63% to 45 million shares. Auto, oil and bank stocks led the increase in the index on attractive valuations.

At the end of trading, the benchmark KSE 100-share Index recorded an increase of 125.78 points, or 0.39%, to settle at 32,584.55.

In its report, Arif Habib Limited stated that the market traded in the positive zone for better part of the session. The index oscillated between -67 points and +277 points and closed with a gain of nearly 126 points, it stated, adding the opening bell saw the index rise by 167 points, which helped investors form a view about the market.

PM Imran’s ongoing visit to the US was considered a key trigger for the investors besides activation of the market opportunity fund, the report pointed out.

“A breakthrough with the US on account of Coalition Support Fund and matters relating to Afghan peace process is considered positive for the market sentiment.”

Cement companies in the northern region were believed to have reduced prices per bag, which dampened sentiments at the bourse earlier in the session. The cement sector led the volumes table with trading in 8.5 million shares, followed by the technology sector (5.2 million).

Among individual stocks, Maple Leaf Cement came on top with volumes of 4.4 million shares, followed by TRG Pakistan with 3.7 million.

Sectors contributing to positive close of the market included exploration and production (up 47 points), banks (37 points), fertiliser (21 points), oil and gas marketing (21 points) and pharmaceutical (15 points).

Volumes declined 63% from 121.5 million shares to 44.5 million shares. Average traded value also declined 55% to $12.4 million against $27.3 million, the report stated.

Stocks that contributed significantly to the volumes included Maple Leaf Cement, TRG Pakistan, Pak Elektron, International Steels and DG Khan Cement, which accounted for 34% of the total volumes.

JS Global analyst Maaz Mulla said the KSE-100 index blew hot and cold, touching an intra-day high of 277 points and low of 67 points.

He said major gainers of the day were HBL (+2.1%), Oil and Gas Development Company (OGDC, +1.5%), Pakistan Oilfields Limited (POL, +2.3%), Fauji Fertiliser Company (+1%) and Searl (+4.1%).

Investor interest was seen in the exploration and production and banking sectors, where POL (+2.3%), Pakistan Petroleum (+0.3%), OGDC (+1.5%), HBL (+2.1%) and UBL (+0.8%) were major gainers of the two sectors, he said.

“Moving ahead, we recommend investors to stay cautious and adopt sell-on-strength strategy,” he added.

Overall, trading volumes decreased to 44.7 million shares compared with Friday’s tally of 121.6 million. The value of shares traded during the day was Rs1.99 billion.

Shares of 312 companies were traded. At the end of the day, 151 stocks closed higher, 138 declined and 23 remained unchanged.

Maple Leaf Cement was the volume leader with 4.4 million shares, losing Rs0.57 to close at Rs19.21. It was followed by TRG Pakistan with 3.8 million shares, losing Rs0.15 to close at Rs12.85 and Pak Elektron with 2.8 million shares, losing Rs0.38 to close at Rs15.88.

Foreign institutional investors were net buyers of Rs54.86 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.