Market watch: KSE-100 gains 341 points as trade deficit contracts

Benchmark index increases 0.91% to settle at 37,583.89

KARACHI: Continuing the positive momentum, the KSE-100 index rose 341 points on Friday because of encouraging trade data, which bolstered investor sentiment.

Data from the Pakistan Bureau of Statistics, released on Thursday, showed a 33.5% contraction in trade deficit in first four months of the current fiscal year 2019-20.

In the morning, the first session began with a short-lived spike at the stock exchange, but it caused volatility as the index oscillated between red and green zones. Although the session remained largely range bound, the KSE-100 index managed to end with a gain of 155 points.

Later, a buying spree at the beginning of the second session helped the index extend gains and inch closer to the 37,600-point mark.

At close, the benchmark KSE 100-share Index recorded an increase of 340.69 points, or 0.91%, to settle at 37,583.89.

In its report, Arif Habib Limited stated that high trading volumes and a surge in the index had become a new normal for the KSE-100 index.

"Altogether, the index has gained around 9,000 points so far from the low of 28,671 points hit in August 2019," he said. "Since then, the index has been going up and Friday was no different."

Buying activity was seen almost across the board but was mainly contributed by banking, oil and gas marketing, steel, cement and fertiliser sectors. The cement sector led the volumes table with trading in 82.9 million shares, followed by banks (53.9 million) and engineering companies (38.1 million).

Stock-wise activity showed that The Bank of Punjab topped the chart with 36.2 million shares changing hands, followed by Maple Leaf Cement (25 million) and Dost Steels (20.9 million), the report added.

JS Global analyst Maaz Mulla said the market continued its bullish momentum, with a strong upward movement across the board. The KSE-100 index gained 341 points to close at 37,584.

"During the week, the KSE-100 index gained around 4.5%," he said. "Bulls continued with a healthy activity seen in key sectors such as cement, banks and steel."

Local and foreign investors aggressively participated in market activity, he said. Volumes improved as 369 million shares were traded as compared to 336 million shares in the previous trading session.

The Bank of Punjab (+4.7%) was among the market leaders in terms of traded volume with trading in 36 million shares.

In the steel sector, International Steels (+5%), Amreli Steels (+5%), Aisha Steel Mills (+10.6%) and Mughal Iron and Steel (+4.9%) all closed at their respective upper circuits.

The cement sector also enjoyed the upward trend where Cherat Cement (+4.2%), Fauji Cement (+3.2%), Maple Leaf Cement (+1.9%), Pioneer Cement (+1.6%) and DG Khan Cement (+0.9%) closed higher than their previous day's close.

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

Overall, trading volumes increased to 369 million shares compared with Thursday's tally of 336.4 million. The value of shares traded during the day was Rs9.6 billion.

Shares of 400 companies were traded. At the end of the day, 296 stocks closed higher, 94 declined and 10 remained unchanged.

The Bank of Punjab was the volume leader with 36.3 million shares, gaining Rs0.49 to close at Rs10.87. It was followed by Maple Leaf Cement (R) with 25 million shares, gaining Rs0.72 to close at Rs7.98 and Dost Steels with 20.9 million shares, gaining Re1 to close at Rs6.96.

Foreign institutional investors were net sellers of Rs22.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.