Market watch: Bulls hold ground as KSE-100 crosses 32,000 mark

Benchmark index increases 195.91 points to settle at 32,033.21

KARACHI: The benchmark KSE-100 index extended gains on Friday and ended up nearly 196 points in volatile trading as investor sentiment remained upbeat despite a decline in international oil prices.

The positive activity came on the back of currency stability as Pakistani rupee recovered Rs0.71 against the US dollar on Thursday, coupled with a rise in Asian markets.

The Economic Coordination Committee (ECC)’s approval of a Rs300-billion package to bail out the power sector led to a steady rise in stocks of the sector.

Oil stocks were, however, battered throughout the session following a massive dip in global oil prices.

At close, the benchmark KSE-100 index recorded an increase of 195.91 points, or 0.62%, to settle at 32,033.21.

Arif Habib Limited, in its report, stated that the market recorded a drop of 460 points earlier in the session, which was largely a factor of the crash in oil prices overnight. West Texas Intermediate (WTI) crude closed 7.5% down from its opening level.

“Resultantly, the oil and gas chain saw selling pressure and profit-booking but by the close of session some of the stocks inched up, though they still closed in the red,” it said.

“The cement sector continued to display strength, supported by a relief package for the construction sector; DG Khan Cement and Lucky Cement remained attractive, and by the end of the session, Maple Leaf Cement also witnessed buying activity.”

In the banking sector, HBL maintained its level for the past couple of sessions, whereas UBL registered price gains.

Furthermore, prospects of easing of the lockdown by provincial governments had so far been largely in the interest of cement stocks.

The cement sector maintained its lead in trading volumes with 33.3 million shares changing hands, followed by oil and gas marketing companies (17.1 million) and power sector (12.4 million).

Stocks that contributed positively to the index included Bank Alfalah (+34 points), Engro (+33 points), MCB (+19 points), Sui Northern Gas Pipelines (+19 points) and Fauji Fertiliser Company (+18 points).

Meanwhile, stocks that contributed negatively were OGDC (-37 points), Pakistan Petroleum (-34 points), Mari Petroleum (-17 points), Pakistan Oilfields (-15 points) and Pakistan Tobacco (-12 points).

JS Global analyst Danish Ladhani said the market opened on a negative note on last trading day of the week and touched intra-day high and low of +248 and -460 points respectively before finally closing at 32,033, up 0.6%.

“Overall, the market remained mixed in line with regional peers as an agreement between Saudi Arabia and Russia for record oil production cuts was at risk after Mexico refused to participate in the curbs and left the meeting without approving the deal,” he said.

“Moreover, on the economic front, Pakistan estimates a loss of 0.8% to 1.3% in GDP growth due to the pandemic. Furthermore, the State Bank of Pakistan’s foreign exchange reserves fell below $11 billion.”

OGDC (-2.7%), Pakistan Petroleum (-2.6%) and Pakistan Oilfields (-1.7%) in the exploration and production sector remained under pressure due to tumbling oil prices in the international market.

HBL (+0.5%), UBL (+1.4%), MCB (+1.4%), Engro (+1.7%), Fauji Fertiliser Company (+1.2%) and Lucky Cement (+0.7%) contributed to positive close of the index.

“Going forward, we expect the market to remain mixed with no immediate trigger amid the coronavirus pandemic,” the analyst said.

Overall, trading volumes decreased to 127.1 million shares compared with Thursday’s tally of 216.5 million. The value of shares traded during the day was Rs5 billion.

Shares of 328 companies were traded. At the end of the day, 192 stocks closed higher, 118 declined and 18 remained unchanged.

Hascol Petroleum was the volume leader with 11.9 million shares, losing Rs0.35 to close at Rs15.15. It was followed by K-Electric with 10.5 million shares, gaining Rs0.02 to close at Rs2.90 and Maple Leaf Cement with 10.2 million shares, gaining Rs0.12 to close at Rs23.95.

Foreign institutional investors were net sellers of Rs120 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.