Market watch: KSE-100 crosses 34,000 points due to robust investor sentiment

Benchmark index rises 503.96 points to settle at 34,027.70

KARACHI: Bulls dominated the stock market on Thursday as the KSE-100 index rallied and gained 504 points. The bourse managed to cross the 34,000-point mark for the first time since July 2019.

The rise was attributed mainly due to the decline in treasury bill yields in the latest auction where yields of three, six and 12-month bills fell 4 basis points (bps), 29bps and 38bps respectively.

Investor confidence got further support from the State Bank of Pakistan governor's remarks in which he indicated that the economy was moving towards macroeconomic stabilisation and success on the external sector.

Earlier, trading began on a positive note and a buying spree emerged shortly afterwards due to robust investor sentiment. A few dips were seen which were erased immediately. The uptrend continued till the end of trading with the KSE-100 index finishing the day with handsome gains.

At close, the benchmark KSE 100-share index recorded a rise of 503.96 points, or 1.5%, to settle at 34,027.70 points.

JS Global analyst Danish Ladhani said equities closed on a positive note with the benchmark KSE-100 index gaining 504 points and closing at 34,028, up 1.5%.

"However, the market can remain choppy ahead of FATF (Financial Action Task Force) meeting," he said. "Further turbulence may be seen in the market on the back of planned JUI-F (Jamiat Ulema-e-Islam-Fazl) long march to Islamabad."

In the cement sector, Lucky Cement (+4%) was the major gainer. A rally was seen in the fertiliser sector where Dawood Hercules (+2.7%) and Engro (+1.2%) remained positive.

Mixed sentiment was seen in the exploration and production sector where Oil and Gas Development Company (+1.6%) and Pakistan Oilfields (+2%) were in the green zone whereas Pakistan Petroleum (-0.2%) remained in the red zone. However, oil prices in the international market dipped despite the resumption of US-China trade talks.

Furthermore, mixed sentiment was witnessed in the financial sector where big banks HBL (+1.5%), UBL (+2.1%) and MCB Bank (+1.6%) moved up.

Traded value stood at $54 million, up 32% and volumes came in at 261 million shares, up 10%. Major contribution to the total market volume came from Lotte Chemical (+3.4%), Pakistan International Bulk Terminal (+4.2%), K-Electric (+3.7%) and Unity Foods (+2.4%), Ladhani said.

In a report, Arif Habib Limited stated that the stock market rebounded with a jump of over 500 points that took the index above 34,000, the level last seen in early July 2019.

"Activity was observed across the board, but was mainly contributed by banking and cement sectors," it said. "Expectation of a further increase in cement prices sparked optimism in the cement sector while improvement in the fixed income portfolio of banks also inspired investors."

Volumes improved to 261 million shares with contribution mainly from the chemical sector, which recorded a turnover of 49.4 million shares, followed by the cement sector (30.3 million) and banks (23.9 million).

Overall, trading volumes increased to 261.6 million shares compared with Wednesday's tally of 237.7 million. The value of shares traded during the day was Rs8.5 billion.

Shares of 400 companies were traded. At the end of the day, 247 stocks closed higher, 132 declined and 21 remained unchanged.

Lotte Chemical was the volume leader with 26.8 million shares, gaining Rs0.53 to close at Rs16.01. It was followed by Pakistan International Bulk Terminal with 17.3 million shares, gaining Rs0.38 to close at Rs9.51 and K-Electric with 16.5 million shares, gaining Rs0.15 to close at Rs4.18.

Foreign institutional investors were net sellers of Rs298.5 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.