Market watch: Stock market begins year with bullish trading

Benchmark index increases 664.92 points to settle at 41,400

KARACHI: Investors welcomed the new year with bullish sentiment as the benchmark KSE-100 index surged 665 points on the very first day of the year 2020.

Investor participation increased in big numbers as optimism prevailed because the year 2019 ended on an upbeat note for the stock market. The KSE-100 index closed the previous year as one of the best-performing indices in the region with a 10% return.

Buying was witnessed across the board with all index-heavy sectors ending the day with substantial gains.

Earlier, trading kicked off on a positive note and the market saw investors cherry-pick stocks. The uptrend continued for the rest of the day. In the final hour, the index crossed the 41,500-point mark, however, correction before the close pushed it down slightly.

At close, the benchmark KSE 100-share Index recorded an increase of 664.92 points, or 1.63%, to settle at 41,400.

Arif Habib Limited, in its report, stated the first day of 2020 started with a bang and contributed +665 points to the index.

"During the session, the market went up 809 points," it said. "Buying activity was seen across the board, especially in banks and cement companies."

K-Electric recorded the highest trading volume of 119 million shares, which came on the back of quarterly tariff adjustment announced by the National Electric Power Regulatory Authority (Nepra).

Trading volumes increased significantly to 330 million shares, with the index crossing the 41,500-point level.

The power sector led the volumes with trading in 121 million shares, followed by the technology sector (30.2 million) and vanaspati sector (26.6 million). Among individual stocks, K-Electric led the table followed by Unity Foods (26.6 million shares) and Fauji Foods (17.5 million), the report added.

In its report, Topline Securities stated the KSE-100 index recorded a massive growth of 665 points. "Investor sentiment was largely positive as CPI for the month of December was in line with street consensus," it said.

"Furthermore, the revenue collection, which stands at Rs2.080 trillion for 1HFY20, is higher by 16.95% year-on-year."

Top contributors to the index included HBL (+90 points), UBL (+74 points), Engro (+64 points), Pakistan Oilfields (+45 points) and MCB Bank (+36 points).

Investor participation in terms of volume was up 87% day-on-day at 331 million shares, led by K-Electric (119 million), while the traded value was up 14%, the report added.

Overall, trading volumes soared to 330.7 million shares compared with Tuesday's tally of 177.1 million. The value of shares traded during the day was Rs8.1 billion.

Shares of 361 companies were traded. At the end of the day, 280 stocks closed higher, 67 declined and 14 remained unchanged.

K-Electric was the volume leader with 119.4 million shares, gaining Rs0.39 to close at Rs4.76. It was followed by Unity Foods with 26.6 million shares, gaining Rs0.72 to close at Rs16.83 and Fauji Foods with 17.5 million shares, gaining Rs0.98 to close at Rs15.45.

Foreign institutional investors were net sellers of Rs291 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.