Market watch: KSE-100 crosses 34,000-point mark

Benchmark index rises 90.74 points to settle at 34,021.97

KARACHI: Bulls continued to dominate the stock market as the benchmark KSE-100 index gained around 91 points on Monday and managed to cross the 34,000-point mark.

Investor confidence got support from a surge in global crude oil prices, which deepened interest in the exploration and production sector.

However, pre-budget uncertainty coupled with release of inflation reading by the Pakistan Bureau of Statistics (PBS) for May – which came in at 8.2% – dented investors’ sentiment.

Earlier, trading began on a positive note and a buying spree emerged shortly afterwards due to robust investors’ interest. A few dips were recorded, which were rectified immediately.

The uptrend continued till the end of trading with the KSE-100 index starting the week with moderate gains.

At close, the benchmark KSE-100 index recorded an increase of 90.74 points, or 0.27%, to settle at 34,021.97.

JS Global analyst Danish Ladhani said the KSE-100 index extended gains by almost 91 points. “The market remained in a consolidation phase due to a lack of major triggers ahead of FY21 budget announcement next week,” he stated. “Moreover, May 2020 inflation reading came in at 8.22% year-on-year.”

Fatima Fertiliser (-0.6%) in the fertiliser sector announced CY19 earnings per share (EPS) of Rs5.75 versus Rs5.67 last year with cash dividend of Rs2 per share.

“In the exploration and production sector, Pakistan Oilfields (+2.1%), Pakistan Petroleum (+0.7%), and Oil and Gas Development Company (OGDC, +2.1%) were in the green zone as international oil prices inched up ahead of upcoming OPEC+ meeting,” he added.

Profit-taking was noted in the cement sector where Lucky Cement (-1.4%), DG Khan Cement (-1.9%), Pioneer Cement (-2.1%), Maple Leaf Cement (-0.8%) and Cherat Cement (-1.7%) closed lower.

“Going forward, we expect the market to trade sideways and recommend investors to sell on strength,” the analyst concluded.

Arif Habib Limited, in its report, stated that the market traded in a narrow range of +131 points and -111 points, closing the session up by 91 points.

“Exploration and production, and banking stocks largely remained positive, whereas cement, fertiliser and pharma stocks faced selling pressure,” the report said.

The report added that the release of Consumer Price Index (CPI) data, which came in line with street estimates (8.2% for May 2020) hinted that there might not be any policy rate cut in the near future.

However, the exploration and production sector got traction from an increase in international crude oil prices, which increased from the levels witnessed on Friday.

Stocks that contributed positively to the index included MCB (+55 points), UBL (+36 points), OGDC (+34 points), HBL (+26 points) and Bank AL Habib (+24 points).

Meanwhile, stocks that contributed negatively were Hubco (-20 points), Lucky Cement (-17 points), Dawood Hercules (-14 points), Nestle (-12 points) and Mari Petroleum (-12 points).

Overall, trading volumes decreased to 198.1 million shares compared with Friday’s tally of 233 million. The value of shares traded during the day was Rs7.3 billion.

Shares of 354 companies were traded. At the end of the day, 141 stocks closed higher, 195 declined and 18 remained unchanged.

Pak Elektron was the volume leader with 22.7 million shares, gaining Rs1.10 to close at Rs24.36. It was followed by Unity Foods with 14.2 million shares, gaining Rs0.22 to close at Rs13.67 and Fauji Foods with 11.4 million shares, gaining Rs0.37 to close at Rs11.15.

Foreign institutional investors were net sellers of Rs307.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.