Market watch: Stocks gain as investors cheer farm package

KSE-100 index rises 111.86 points to settle at 33,804.90

KARACHI: Bullish momentum continued at the bourse on Thursday that supported the KSE-100 index in extending its advance by 112 points following approval of a Rs50-billion agriculture package, which sparked interest in investment in agriculture-related stocks.

Investors also awaited the announcement of monetary policy on Friday when many market participants anticipated another policy rate cut.

Earlier, trading began with a sharp spike and the index traded close to 34,000 points in initial hours. Market players began accumulating fertiliser and tractor companies’ stocks, however, the uptrend could not be sustained because the investors’ joy over the relief package subsided soon afterwards.

For the rest of the session, the KSE-100 index experienced range bound trading but a buying spree towards the end helped accelerate gains.

At close, the benchmark KSE-100 index recorded an increase of 111.86 points, or 0.33%, to settle at 33,804.90.

Arif Habib Limited, in its report, stated that the market made a repeat of Wednesday’s trading session as it opened 204 points up, gained a total of 304 points and closed higher by 112 points.

The fertiliser sector played an important role in posting gains, primarily due to the announcement of the relief package for farmers for the purchase of diammonium phosphate (DAP) and tractors.

Consequently, Fauji Fertiliser hit its upper circuit whereas other fertiliser-sector stocks also went up before facing selling pressure.

Cement, steel, banking and exploration and production sectors largely remained range bound. An upward movement in international crude prices could not excite investors.

The technology sector topped the volumes chart with trading in 40.7 million shares, followed by cement companies (29.1 million) and chemical firms (21.3 million), the report said.

JS Global analyst Maaz Mulla said the benchmark index rose to an intra-day high of +304 points before closing at 33,805, up 112 points.

Traded volumes improved by 10% day-on-day to 240 million shares while traded value decreased to $38 million.

Top stocks in terms of volumes were TRG Pakistan (+6.9%), Unity Foods (+2.8%) and Agritech Limited (+18.5%) that cumulatively contributed more than 54 million shares.

Major movers of the day were Fauji Fertiliser (+2.9%), Millat Tractors (+6.9%), Oil and Gas Development Company (+1.2%), Hubco (-1.9%), HBL (-1.4%) and Bank AL Habib (-1.1%).

On the news front, the government awarded a Rs442-billion contract for the construction of Diamer-Bhasha dam to a joint venture of Power China and Frontier Works Organisation (FWO).

Moreover, selling pressure was witnessed in cement and banking sectors where Kohat Cement (-2.5%), Maple Leaf Cement (-1.7%), Lucky Cement (-0.7%), DG Khan Cement (-0.9%), HBL (-1.4%), Bank Alfalah (-0.7%) and Bank AL Habib (-1.1%) were the major losers.

“Moving forward, we expect the market to trade sideways as the consolidation phase continues. However, investors should take the opportunity to accumulate stocks as the medium to long-term trend remains bullish,” the analyst said.

Overall, trading volumes increased to 240.2 million shares compared with Wednesday’s tally of 219.2 million. The value of shares traded during the day was Rs6.2 billion.

Shares of 352 companies were traded. At the end of the day, 188 stocks closed higher, 147 declined and 17 remained unchanged.

TRG Pakistan was the volume leader with 20.9 million shares, gaining Rs1.55 to close at Rs24.14. It was followed by Unity Foods with 18.6 million shares, gaining Rs0.36 to close at Rs13.14 and Agritech Limited with 14.8 million shares, gaining Rs0.8 to close at Rs5.13.

Foreign institutional investors were net buyers of Rs11.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.