KARACHI: Bulls ruled the stock market in a rally on Wednesday, which pushed the KSE-100 index up by over 600 points over anticipation of single-digit headline inflation for April, which would increase chances of further rate cut in the upcoming monetary policy announcement.
Earlier, trading began on a bullish note at the Pakistan Stock Exchange and the KSE-100 index climbed steadily till the final hours. The market kept on rising throughout the day and crossed the 33,000-point mark.
A few timely dips were, however, noted but these were corrected immediately. All index-heavy stocks performed well and cement and exploration and production sectors remained in the green.
At close, the benchmark KSE-100 index recorded an increase of 605.45 points, or 1.86%, to settle at 33,158.84.
Arif Habib Limited, in its report, said the market opened on a positive note with a rise of 211 points at the opening bell. The benchmark index gained 605 points during the session and closed at the session’s high.
“Oil stocks got traction from the positive trend in international crude oil price - West Texas Intermediate (WTI) - that increased by 14% and helped exploration and production stocks to post gains,” it stated.
“The cement sector maintained the momentum throughout the day, except for profit-booking by the end of the session.”
Furthermore, banking-sector stocks remained muted amid low volumes due to prospects of a further rate cut.
The cement sector posted the highest trading volumes with 43.9 million shares, followed by oil and gas marketing companies (11.8 million) and exploration and production firms (10.8 million).
Stocks that contributed positively to the index included Hubco (+116 points), OGDC (+61 points), Pakistan Oilfields (+50 points), Fauji Fertiliser Company (+45 points) and Lucky Cement (+39 points).
Meanwhile, stocks that contributed negatively were Bank AL Habib (-35 points), HBL (-12 points), Nestle (-8 points), Habib Metropolitan Bank (-4 points) and PSO (-2 points).
JS Global analyst Danish Ladhani said the benchmark KSE-100 index closed at 33,159, up 1.9%, following an unimpressive trading session. “Overall, the volumes remained dry with thin participation from investors due to Ramazan,” he added.
In the exploration and production sector, OGDC (+4.5%), Pakistan Petroleum (+3%) and Pakistan Oilfields (+6.3%) were in the green zone as US crude prices inched up ahead of stockpile data.
“PSO (-0.3%) in the oil marketing companies sector announced 9MFY20 consolidated loss per share of Rs2.19 versus earnings per share of Rs12.62 in the same period of last year with no cash dividend due to hefty inventory losses,” he stated.
Pakistan Oilfields (+6.3%), OGDC (+4.5%), Lucky Cement (+3%), Fauji Fertiliser Company (+2.7%), Pakistan Petroleum (+3%), UBL (+1.8%) and Engro (+0.3%) cumulatively contributed to positive close of the index.
Furthermore, major contribution to the total market volume came from Maple Leaf Cement (+1.4%), Hascol Petroleum (+2%), DG Khan Cement (+0.5%), Engro Fertilisers (+3.5%), Pioneer Cement (+2.5%) and Unity Foods (-0.9%).
“Going forward, we expect the market to remain under pressure and recommend investors to sell on strength amidst the result season,” the analyst said.
Overall, trading volumes decreased to 140.5 million shares compared with Tuesday’s tally of 159.4 million. The value of shares traded during the day was Rs7.7 billion.
Shares of 342 companies were traded. At the end of the day, 226 stocks closed higher, 96 declined and 20 remained unchanged.
Maple Leaf Cement was the volume leader with 18.4 million shares, gaining Rs0.38 to close at Rs27.10. It was followed by Hascol Petroleum with 8.2 million shares, gaining Rs0.28 to close at Rs14.63 and DG Khan Cement with 7.3 million shares, gaining Rs0.39 to close at Rs84.98.
Foreign institutional investors were net sellers of Rs626.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
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