Market watch: KSE-100 continues to advance, gains 274 points

Benchmark index rises 0.94% to settle at 29,505.57

KARACHI: The stock market continued its advance for the second day on Wednesday as the benchmark KSE-100 index gained over 250 points but trading remained mostly range bound.

Investor optimism about stability of the rupee provided some support for the market uptrend.

The bourse kept swinging between red and green zones and although it largely remained positive, the nervousness was very well noted in blue chips, which came under selling pressure.

Moreover, the lower headline inflation reading for March 2020, which came in at 10.24% year-on-year as compared to 12.4% last month, restored investor confidence.

Furthermore, measures taken by the government to minimise the economic impact of the coronavirus outbreak played the role of a catalyst in the bullish momentum.

At close, the benchmark KSE-100 index recorded an increase of 273.94 points, or 0.94%, to settle at 29,505.57.

Arif Habib Limited, in its report, stated that the market remained range bound, oscillating between -330 points and +460 points during the day.

“CPI (Consumer Price Index) release matched street consensus of 10.2% that gave confidence to investors that the next number would be even lower, raising hope that yields on fixed debt instruments, particularly T-Bills and PIBs, will dip further,” it said.

“The trading session saw profit-booking as well that kept the overall market range bound; perhaps weakness in global equity and commodities markets caused investors to rethink their decision,” the report added.

The cement sector led the volumes with trading in 51.1 million shares, followed by oil and gas marketing companies (24.6 million) and banks (15.9 million).

Stocks that contributed positively to the index included Mari Petroleum (+35 points), Dawood Hercules (+35 points), MCB (+24 points), Engro (+23 points) and UBL (+23 points).

Meanwhile, stocks that contributed negatively were Meezan Bank (-24 points), Lucky Cement (-18 points), Engro Fertilisers (-12 points), Nestle (-10 points) and OGDC (-10 points)

JS Global analyst Maaz Mulla said the stock market continued its upward march, touching a high of +459 points during the session and eventually closing at 29,505 (up 0.9%).

“Overall market remained range bound after yesterday’s (Tuesday’s) value buying. Moreover, on the economic front, the Federal Board of Revenue (FBR) has announced a revenue shortfall of over Rs250 billion for March owing to the coronavirus-led downturn in economic activity,” he added.

“Going forward, we expect the market to remain range bound as the coronavirus situation prevails across the globe, and recommend investors to stay cautious,” he said.

Overall, trading volumes decreased to 193.7 million shares compared with Tuesday’s tally of 221.9 million. The value of shares traded during the day was Rs6.7 billion.

Shares of 358 companies were traded. At the end of the day, 214 stocks closed higher, 122 declined and 22 remained unchanged.

Maple Leaf Cement was the volume leader with 24.6 million shares, gaining Rs0.35 to close at Rs21.07. It was followed by Hascol Petroleum with 17.9 million shares, gaining Rs0.13 to close at Rs11.78 and Unity Foods with 10.2 million shares, losing Rs0.14 to close at Rs9.74.

Foreign institutional investors were net sellers of Rs737.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.