Market watch: Index advances on buying in banking, cement stocks

Benchmark index increases 474.86 points to close at 40,884.24

KARACHI: Following an extremely bearish session, the KSE-100 index recovered partially on Tuesday aided by the Economic Coordination Committee's (ECC) decision to delay the proposed hike in gas prices, which acted as positive trigger for market participants.

Buying in banking and cement sector scrips owing to strong valuations coupled with finance ministry's affirmations of a likely easing in inflation on the back of ongoing government measures lent further support. In addition, encouraging results of a banking sector company led investors to accumulate its stocks.

Trading began with a sharp spike amid positive sentiments; however, the index was unable to sustain the gains and traded flat at noon. Positive outcome of the ECC meeting sparked a buying spree at the bourse during mid-day which lifted the index upwards to finish closer to the 41,000-point mark.

At close, the benchmark KSE-100 index recorded an increase of 474.86 points, or 1.18%, to settle at 40,884.24.

In a report, Arif Habib Limited stated that market staged a recovery after a major draw down of 1,222 points on Monday and largely remained positive throughout the session barring down 60 points earlier in the session.

"Overall, the index moved up by 544 points and closed the session up 475 points," it said. "Banking sector played an important role in market recovery as MCB's result announcement further helped the other banking sector stocks to post gains."

Resultantly, banking sector posted trading volumes of 27.1 million shares, followed by cement (21.7 million) and oil and gas marketing companies (19.9 million).

Among scrips, the Bank of Punjab topped the charts with 16.4 million shares, followed by Hascol (15.7 million) and Unity (8.3 million), the report added.

JS Global analyst Danish Ladhani said equities closed Tuesday on a positive note with the benchmark KSE-100 Index gaining 475 points, closing at 40,884 levels, up 1.2%.

"The recovery followed a steep fall in the previous trading session," he said.

MCB (+4.6%), HUBC (+3.3%), ENGRO (+2.1%), UBL (+2.5%), BAHL (+2.4%), LUCK (+2.2%), PSO (+1.5%) and OGDC (+0.6%) cumulatively contributed 327 points towards the positive index close.

"We expect the market will remain sideways in the short-term on the back of uncertainty on the political front, the ongoing International Monetary Fund (IMF) meetings and the Financial Action Task Force (FATF) review session in later this month," the analyst said.

Overall, trading volumes decreased to 146.1 million shares compared with Monday's tally of 203.1 million. The value of shares traded during the day was Rs6.1 billion.

Shares of 350 companies were traded. At the end of the day, 246 stocks closed higher, 92 declined and 12 remained unchanged.

Bank of Punjab was the volume leader with 16.4 million shares, gaining Rs0.28 to close at Rs13.12. It was followed by Hascol Petroleum with 15.7 million shares, gaining Rs0.38 to close at Rs25.69 and Unity Foods with 8.3 million shares, gaining Rs0.09 to close at Rs13.83.

Foreign institutional investors were net sellers of Rs604.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.