Market watch: KSE-100 rises 652 points amid global recovery

Benchmark index increases 2.13% to settle at 31,231.55

KARACHI: A day after plunging over 1,000 points, the benchmark KSE-100 index staged a modest rally and rose 652 points amid a recovery in global stock markets.

World markets enjoyed a second day of gains on Tuesday as signs of easing threat from the coronavirus in both Europe and the United States and some stimulus measures kept investors interested in the bourses.

Japan’s Nikkei rose 2% and erased most of last week’s losses after Prime Minister Shinzo Abe promised a massive $991-billion economic stimulus package - equal to 20% of gross domestic product (GDP).

MSCI’s broadest index of Asia-Pacific shares outside Japan pared early gains, but still rose 1.4%.

Europe was in the swing of things too. The pan-European Stoxx 600 index climbed roughly 3% as markets in London, Frankfurt, Paris, Milan, and US futures, all moved higher.

Earlier, trading began with a sharp spike at the Pakistan Stock Exchange and the uptrend continued for the rest of the day. A few dips were witnessed which were rectified timely. The advance accelerated in the final hours.

At close, the benchmark KSE-100 index recorded an increase of 652.4 points, or 2.13%, to settle at 31,231.55.

JS Global analyst Danish Ladhani said the stock market opened on a positive note, touching intra-day high of +724 points and closed at 31,231, up 2.1%.

“Overall, the market remained bullish with low volumes and limited participation due to the corona outbreak as the lockdown continued across major cities of Pakistan amidst increasing cases,” he said.

On the economic front, the International Monetary Fund (IMF) postponed approval of second review of the $6-billion bailout programme that was scheduled for coming Friday due to delay in implementing agreed actions by Pakistan.

Exploration and production, and cement sectors kept investor interest alive. Oil and Gas Development Company (+5.4%), Pakistan Petroleum (+6%) and Pakistan Oilfields (+1.5%) remained bullish as international oil prices bounced back on reports that Russia had confirmed its participation in a meeting of leading oil producers on April 9.

Cherat Cement (+6.7%), DG Khan Cement (+7.1%) and Pioneer Cement (+7%) closed at their respective upper circuits as builders and developers were planning to initiate around 1,000 new projects worth over Rs1 trillion over nine months ending December 2020.

Engro (+1.2%), HBL (+3.9%), Hubco (+4.5%), Fauji Fertiliser (+1%), Oil and Gas Development Company (+5.4%), MCB (+0.1%), Pakistan Petroleum (+6%) and Lucky Cement (+4.6%) cumulatively contributed to the positive close.

Traded value stood low at $40 million, down 22% and volumes came in at 173 million shares, down 26%.

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

Arif Habib Limited, in its report, stated that expectation of early release of Covid-19-related financial assistance by the IMF kept the mood elevated at the bourse, which was further aided by an uptrend in international crude prices that gained 3%.

Besides exploration and production stocks, cement and steel sectors also rallied based on a construction package announced last Friday.

The cement sector led the volumes with trading in 54.5 million shares, followed by oil and gas marketing companies (23.1 million) and banks (21.4 million), it added.

Overall, trading volumes decreased to 172.8 million shares compared with Monday’s tally of 233.3 million. The value of shares traded during the day was Rs6.8 billion.

Shares of 335 companies were traded. At the end of the day, 215 stocks closed higher, 100 declined and 20 remained unchanged.

Maple Leaf Cement was the volume leader with 20.4 million shares, gaining Rs1.14 to close at Rs23.39. It was followed by Hascol Petroleum with 19.9 million shares, gaining Re1 to close at Rs14.85 and Fauji Cement with 9.9 million shares, gaining Rs0.44 to close at Rs16.01.

Foreign institutional investors were net sellers of Rs1.04 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.