Market watch: KSE-100 gains 76 points on higher oil prices

Benchmark index rises 0.22% to settle at 33,992.75

KARACHI: The benchmark KSE-100 index rebounded on Tuesday and posted a gain of 76 points owing to a jump in international oil prices coupled with hopes of easing of a nationwide lockdown.

During the trading session, global oil prices bounced back modestly with the West Texas Intermediate (WTI) crude futures rising 9.6% and Brent crude futures increasing 7.4%. The recovery triggered a buying spree in oil stocks at the Pakistan stock market and resultantly, exploration and production and oil marketing companies closed entirely in the green.

Market speculation that companies would resume operations from May 10 in Pakistan lent further support and fuelled bullish trade.

The index shot up at the beginning of trading, however, investors started booking profit soon after and most of the gains were eroded by noon. The index turned largely range bound towards the end of trading. Nevertheless, optimism helped the bourse end the day with some gains.

At close, the benchmark KSE-100 index recorded an increase of 76.11 points, or 0.22%, to settle at 33,992.75.

JS Global analyst Maaz Mulla said the market witnessed positive investor sentiment with the index touching intra-day high of +469 points. “However profit-booking emerged, which dragged the index down to 33,993, up 76 points from Monday’s close,” he said.

Volumes improved as 261 million shares were traded in the market as compared to 216 million shares in the previous session.

Hascol Petroleum (+4.6%), Unity Foods (+6.1%) and Fauji Cement (-0.2%) were among market leaders in the traded volume with a cumulative 77 million shares changing hands.

On the news front, Prime Minister Imran Khan announced that the government was going to reopen many businesses by further easing the lockdown restrictions.

The exploration and production sector experienced heavy participation of investors as crude oil prices recovered in the international market. Oil and Gas Development Company (+1.8%), Pakistan Petroleum (+2.5%) and Pakistan Oilfields (+2%) were major movers of the sector.

Pressure was witnessed in the cement sector as investors opted to book profit. Pioneer Cement (-4.7%), Cherat Cement (-4.1%), Maple Leaf Cement (-2.2%), DG Khan Cement (-2%), Kohat Cement (-2.8%) and Lucky Cement (-0.1%) were major losers of the sector.

“Going forward, we expect the market to remain under pressure and recommend investors to sell on strength and wait for further dip,” the analyst said.

Arif Habib Limited, in its report, said courtesy of crude performance in the international market, the KSE-100 posted decent gains, realising an increase of 469 points and closing the session up by 76 points.

Exploration and production and oil marketing companies’ stocks remained in the limelight but experienced profit-booking near Monday’s levels.

Cement and fertiliser sectors saw further weakness, and banks also contributed to the downturn in the benchmark index.

The cement sector topped the chart with trading in 58.4 million shares, followed by oil and gas marketing companies (38.7 million) and technology firms (26.9 million), the research house said.

Overall, trading volumes increased to 261.3 million shares compared with Monday’s tally of 216.6 million. The value of shares traded during the day was Rs9.2 billion.

Shares of 341 companies were traded. At the end of the day, 181 stocks closed higher, 131 declined and 29 remained unchanged.

Hascol Petroleum was the volume leader with 33.8 million shares, gaining Rs0.68 to close at Rs15.62. It was followed by Unity Foods with 25.4 million shares, gaining Rs0.73 to close at Rs12.62 and Fauji Cement with 17.9 million shares, losing Rs0.03 to close at Rs16.95.

Foreign institutional investors were net sellers of Rs337.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.