Market watch: KSE-100 gains 280 points as bourse turns bullish

Benchmark index rises 0.89% to settle at 31,938.48

KARACHI: The stock market took a U-turn on Wednesday and closed with a handsome gain of 280 points as investor participation spiked relative to previous sessions.

Earlier, the benchmark KSE-100 index had dropped for three consecutive sessions. Expectations about a hike in petroleum product prices, which were due to be announced later in the day, gave a boost to stocks of exploration and production and oil and gas marketing companies.

In the morning, trading began on a positive note, but the KSE-100 index remained volatile until midday and oscillated between red and green zones. After midday, investor sentiments strengthened and were reflected in trading as the index gained momentum and inched closer to the 32,000-point mark.

Owing to the bullish sentiments, all index-heavy sectors registered gains.

At the end of trading, the benchmark KSE 100-share Index recorded an increase of 280.36 points, or 0.89%, to settle at 31,938.48.

JS Global analyst Maaz Mulla said after three days of negative close, the market decided to play in the green region. It opened upwards before retracing its steps with a low of -113 points.

"At the end of the day, the KSE-100 managed to close positive, touching a high of +311 points before closing up 280 points at 31,938," he said. "Volumes increased 37% day-on-day to 70 million shares compared to 51 million shares in the previous trading session."

Maple Leaf Cement (+3.5%), TRG Pakistan (+2.3%) and International Steels (+5%) were the volume leaders, exchanging 17 million shares throughout the day.

Investor interest was witnessed in the cement sector where DG Khan Cement (+3.8%), Maple Leaf Cement (+3.5%), Pioneer Cement (+2.5%), Fauji Cement (+2.3%) and Lucky Cement (+0.8%) were the major movers.

In the exploration and production sector, Pakistan Oilfields (+1.7%), Pakistan Petroleum (+2.2%) and Oil and Gas Development Company (+0.5%) moved higher as crude oil prices edged up in the international market.

"Moving ahead, we expect the market to exhibit volatility in coming sessions due to the ambiguity in political environment," the analyst added.

In its report, Arif Habib Limited stated that the market finally rebounded on the last day of July.

"Positivity was seen across the board and was led by activity in cement and steel sectors," it pointed out. "Among automobile stocks, Honda Atlas and Ghandhara Nissan hit their upper circuits."

Similarly in the steel sector, International Steels touched its upper price ceiling. The exploration and production sector saw positivity since the beginning of the day on the back of higher crude oil prices.

Across-the-board positivity can be attributed to expectations of timid inflation and reversal of the State Bank's policy rate in the short run.

Besides, the last day of rollover week contributed to the positive investor sentiment.

The cement sector led the volumes' table with trading in 14.5 million shares, followed by technology companies (9 million) and engineering firms (8.7 million).

"Among individual stocks, Maple Leaf Cement took the lead with trading in 7.1 million shares, followed by TRG Pakistan (5.7 million) and International Steels (4.3 million)."

Overall, trading volumes increased to 70.2 million shares compared with Tuesday's tally of 51.3 million. The value of shares traded during the day was Rs2.6 billion.

Shares of 343 companies were traded. At the end of the day, 219 stocks closed higher, 104 declined and 20 remained unchanged.

Maple Leaf Cement was the volume leader with 7.1 million shares, gaining Rs0.6 to close at Rs17.54. It was followed by TRG Pakistan with 5.7 million shares, gaining Rs0.28 to close at Rs12.45 and International Steels with 4.3 million shares, gaining Rs1.44 to close at Rs30.24.

Foreign institutional investors were net buyers of Rs263.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.