Market watch: KSE-100 rises as investors cheer low inflation
Cement and banking sectors were in the limelight in early trading. PHOTO: FILE
Despite a tumultuous session, the KSE-100 index maintained its uptrend for the fifth consecutive session and advanced 89 points, driven by an encouraging inflation data for June.
The Consumer Price Index (CPI) was calculated at 8.6% for June 2020, according to the Pakistan Bureau of Statistics, which raised hopes of a further monetary easing in the monetary policy announcement, expected later this month.
Investors’ sentiment remained mixed as they cheered the low inflation reading on the one hand while on the other anticipated a subdued corporate result season this month, which triggered sell-off at regular intervals.
Cement and banking sectors were in the limelight in early trading, however, profit-booking later in the day dampened interest in both the sectors.
The benchmark index spiked at the beginning of trading and kept rising till midday after which selling pressure, on the back of anticipation of weak financial results, wiped off most of the gains.
The market staged another rally that extended the gains but selling pressure towards the end erased most of the gains.
At close, the benchmark KSE-100 index recorded an increase of 88.77 points, or 0.25%, to settle at 34,978.18 points.
Arif Habib Limited, in its report, stated that the KSE-100 index went up 288 points during the session, with contribution from a mix of sectors including cement and fertiliser, which hit the day’s high in early trading, but faced profit-booking later.
The banking sector gained further as investors showed renewed interest post-CPI data.
Among cyclical stocks, the engineering (steel) sector showed better performance, getting support primarily from Mughal Iron and Steel and Amreli Steels, which traded at and near their upper circuits.
Similar price performance was witnessed in pharmaceutical stocks, among which Searle and Ferozsons Laboratories remained prominent.
The technology sector contributed the most to the traded volumes with 105.3 million shares, followed by cement companies (51.7 million) and banks (27.3 million), the report said.
JS Global analyst Danish Ladhani said bulls dominated the KSE-100 index that touched a high of +288 points. However, in the second half, the market came down and closed at 34,978, up 89 points.
Volumes for the day were 382 million with WorldCall Telecom (+12%), TRG Pakistan (+3.9%), Maple Leaf Cement (-0.4%), Pak Elektron (+0.7%) and Hascol Petroleum (+1.5%) leading the charts. A cumulative 140 million shares changed hands in these companies.
Major movers of the day were UBL (+1.6%), Bank AL Habib (+2.1%), MCB (+1.2%), Hubco (-1.9%), Fauji Fertiliser Company (-0.7%) and Lucky Cement (-0.2%) that drove the market in both directions.
Investors’ interest was noted in cement and banking sectors with heavy participation in DG Khan Cement (+0.5%), Lucky Cement (-0.2%), Maple Leaf Cement (-0.4%), Pioneer Cement (-0.5%), HBL (+0.8%), UBL (+1.6%), MCB (+1.2%) and Bank AL Habib (+2.1%).
The steel sector also enjoyed the upward trend where Mughal Iron and Steel (+6.3%), Amreli Steels (+3.3%) and International Steels (+1.8%) remained in the green territory.
“Moving forward, we expect the market to follow the same trend and our top picks are cement and oil marketing companies’ stocks,” the analyst said.
Overall, trading volumes rose to 383.1 million shares compared with Wednesday’s tally of 315 million. The value of shares traded during the day was Rs12.5 billion.
Shares of 381 companies were traded. At the end of the day, 224 stocks closed higher, 131 declined and 26 remained unchanged.
WorldCall Telecom was the volume leader with 52.8 million shares, gaining Rs0.11 to close at Rs1.05. It was followed by TRG Pakistan with 28.7 million shares, gaining Rs1.16 to close at Rs31.16 and Maple Leaf Cement with 21.2 million shares, losing Rs0.1 to close at Rs27.46.
Foreign institutional investors were net sellers of Rs1.3 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.