Market Watch: KSE-100 rises as budget pessimism fades

Benchmark index gains 194.61 points to settle at 34,019.12

KARACHI: Bulls staged a comeback to Pakistan Stock Exchange on Tuesday and added 195 points to the benchmark KSE-100 index on the back of recovery in global stock markets coupled with a rise in international crude oil prices.

Investors’ pessimism over budget announcement faded as they cherry-picked stocks, fueling the uptrend. In addition to that, a sharp rise in Covid-19 infection cases and deaths in Pakistan failed to discourage investors from taking fresh positions.

During the trading session, the price of Brent crude rose 1.94% to $40.49 per barrel while US crude traded at $37.73 a barrel after a gain of 1.64%.

The increase in crude prices sparked a buying spree in the exploration and production and oil marketing sectors at Pakistan bourse, which supported heavyweight oil stocks to end the day with modest gains.

The index shot up as soon as trading began, however, selling pressure emerged soon afterwards and dragged the index down during initial hours.

Investor sentiment recovered following an increase in global oil prices and a rise in international stock markets. It triggered a rally at the local bourse and helped it march upwards. The uptrend supported the market to close above 34,000 points.

At close, the benchmark KSE-100 index recorded an increase of 194.61 points, or 0.58%, to settle at 34,019.12 points.

A report of Arif Habib Limited stated that the market bounced back after registering a loss of 787 points on Monday (post-budget) and posted a recovery of 314 points during the session.

“International crude prices improved overnight that helped exploration and production firms, oil marketing companies and refineries to stage a recovery,” it said. “Cement and steel sectors also saw renewed buying interest, however, overall stock prices did not cross Monday’s highs.”

The chemical sector posted highest trading volumes with 28.7 million shares changing hands, followed by technology firms (27.9 million) and vanaspati companies (20.6 million), the report said.

JS Global analyst Danish Ladhani said the benchmark KSE-100 index bounced back after post-budget correction and gained 194 points, or 0.6%, to close at 34,019.

“Activity was witnessed in sideboard stocks,” he said. Major sectors that posted gains were exploration and production and banking.

Mari Petroleum (+2.1%), Pakistan Oilfields (+1.8%), Hubco (+1.2%), Oil and Gas Development Company (+1.1%), Engro (+0.6%), Pakistan Petroleum (+1.2%), HBL (+0.6%) and UBL (+1%) were the index movers.

Traded value stood down 21% at $39 million and volumes came in at 218 million shares, down 17%.

Major contribution to total market volumes came from Unity Foods (+0.4%), Agritech Limited (+18.8%), TPL Corp (+24.6%), Lotte Chemical (0%), Hum Network (+2.9%) and Hascol Petroleum (+1%).

“Going forward, we expect the market to remain range bound and recommend investors to sell on strength,” the analyst said.

Overall, trading volumes decreased to 217.9 million shares compared with Monday’s tally of 262.8 million. The value of shares traded during the day was Rs6.5 billion.

Shares of 375 companies were traded. At the end of the day, 252 stocks closed higher, 92 declined and 31 remained unchanged.

Unity Foods was the volume leader with 20.6 million shares, gaining Rs0.05 to close at Rs13.01. It was followed by Agritech Limited with 11 million shares, gaining Rs0.8 to close at Rs5.05 and TPL Corp with 8.1 million shares, gaining Re1 to close at Rs5.07.

Foreign institutional investors were net sellers of Rs258.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.