Market watch: Stocks rally as index surpasses 35,000 points

Benchmark KSE-100 index rises 899.85 points to settle at 35,277.46

KARACHI: Bulls reigned at the Pakistan Stock Exchange on Monday as the benchmark index surged nearly 900 points on the back of improved investor sentiment.

The KSE-100 index remained on an uptrend from the moment trading began and managed to power past the 35,000-point mark for the first time in four months. The rally marked the third successive session in the green despite growing political noise.

"A decline in interest rates (secondary market yields), subsiding sit-in fears, stability in currency parity and improvement on the external account front are some key reasons for the improved confidence," said Alpha Beta Core CEO Khurram Schehzad.

Meanwhile, Next Capital Managing Director Muzammil Aslam was of the view that the bullish trend was likely due to the International Monetary Fund review, which was going on satisfactorily, and primary surplus in the first quarter, which indicated that macroeconomic indicators were moving in the right direction.

Moreover, the developing situation in Islamabad suggested that the sit-in was unlikely to continue for long and that also helped propel the index forward.

At close, the benchmark KSE 100-share Index recorded an increase of 899.85 points, or 2.62%, to settle at 35,277.46.

JS Global analyst Maaz Mulla said bulls ruled the bourse, taking the KSE-100 index up by 900 points to 35,277. "The market recovered as value-hunters availed the opportunity to buy stocks at attractive prices," he added.

On the news front, the government managed to keep budget deficit at 0.9% of gross domestic product (GDP), or around Rs400 billion, in first quarter of the current fiscal year - an achievement that was hailed by the IMF, but the country was advised to ensure full use of the budget to achieve development goals.

Bulls continued to dominate across the board as trading activity was noted in all key sectors such as cement, banking and exploration and production.

Active participation was witnessed in the cement sector by local and foreign investors where DG Khan Cement (+5%), Maple Leaf Cement (+5.8%), Cherat Cement (+5%) and Pioneer Cement (+5%) all closed at their respective upper circuits.

Banking and exploration and production sectors also contributed to the climbing index as UBL (+3%), HBL (+4.5%), MCB (+4.6%), NBP (+1.9%), Pakistan Oilfields (+2.6%), Oil and Gas Development Company (+1.6%) and Pakistan Petroleum (+2%) closed in the green zone.

"Moving forward, we expect the market to remain positive, however, we recommend investors to book profits on strength," Mulla added.

Overall, trading volumes increased to 207.8 million shares compared with Friday's tally of 157.1 million. The value of shares traded during the day was Rs8.5 billion.

Shares of 370 companies were traded. At the end of the day, 278 stocks closed higher, 80 declined and 12 remained unchanged.

Fauji Cement was the volume leader with 11.2 million shares, gaining Rs0.30 to close at Rs16.04. It was followed by Hascol Petroleum with 9.4 million shares, gaining Rs0.44 to close at Rs33.13 and The Bank of Punjab with 8.8 million shares, gaining Rs0.19 to close at Rs10.26.

Foreign institutional investors were net sellers of Rs507.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.