Market watch: KSE-100 rally continues on encouraging news flow
Shares of 393 companies were traded. At the end of the day, 214 stocks closed higher. PHOTO: FILE
The long-running rally continued for the 13th consecutive session at the stock exchange on Tuesday on the back of encouraging remittances data and news of oil discovery, which bolstered investors’ sentiment.
Investors were enthused by soaring remittances, which hit a historic high in fiscal year 2019-20 as well as in June 2020 on a year-on-year basis.
Market players turned further optimistic over an oil discovery by MOL, which brought exploration and production stocks under the limelight and helped the entire sector to close with substantial gains.
Earlier, trading began with a short-lived spike and the index fell into negative territory within a few minutes. However, strong investors’ sentiment coupled with encouraging news flow helped lift the index again.
Profit-taking in the cement sector later in the day erased some of the gains and kept the index below 36,800 points at close. Nevertheless, overall positivity at the bourse was reflected in the heavy trade volumes.
At close, the benchmark KSE-100 index recorded an increase of 126.65 points, or 0.35%, to settle at 36,745.22 points.
Arif Habib Limited, in its report, stated that the market recorded trading volumes of over 460 million shares for the second consecutive day and posted a gain of 317 points during the session, taking the KSE-100 index to recent high of 36,936 points.
The highlight of the day turned out to be Pakistan Petroleum, which registered high trading volumes and after initial trading below last day’s closing price, the stock spiked significantly.
Despite a decline in international crude prices, exploration and production stocks (Pakistan Petroleum and Pakistan Oilfields) recorded decent gains.
Pakistan Oilfields also announced a hydrocarbon discovery, which took the stock price near its upper circuit.
Profit-booking was mainly noted in the cement sector throughout the day, which kept the index restricted to an increase of 127 points.
The cement sector posted the highest trading volumes of 51.9 million shares, followed by power firms (48.1 million) and cable companies (37.9 million), the report said.
JS Global analyst Maaz Mulla said bulls dominated most of the trading session where the KSE-100 index touched a high of +317 points and low of -84 points. It closed at 36,745, up 127 points.
Volumes came in at 466 million shares with K-Electric (+7.6%), Pak Elektron (+4.7%), Maple Leaf Cement (-0.7%) and Pakistan Petroleum (+1.1%) leading the charts. These stocks registered cumulative trading in 121 million shares.
On the news front, the International Monetary Fund (IMF) predicted a continued negative impact of the Covid-19 pandemic on different economies and lowered Pakistan’s growth projection by about one percentage point for the current fiscal year, driven by weaknesses in the second half of 2020.
The exploration and production sector gained ground on the back of news of hydrocarbon discovery by MOL in the Tal block. As a result, Pakistan Oilfields (+4.1%), PPL (+1.1%) and OGDC (+0.1%) closed in the green.
The pharmaceutical sector continued its upward trend where Ferozsons Laboratories (+7.5%), GlaxoSmithKline Consumer Healthcare (+2.8%), Searle (+1.9%) and IBL HealthCare Limited (+1.4%) moved up.
Profit-booking was witnessed in the cement sector where Fauji Cement (-1.5%), Pioneer Cement (-1.7%), DG Khan Cement (-1.6%) and Lucky Cement (-0.8%) were the major losers.
“Moving forward, we recommend investors to book profit on strength and wait for a dip for fresh buying,” the analyst said.
Overall, trading volumes fell to 466.3 million shares compared with Monday’s tally of 469 million. The value of shares traded during the day was Rs18.3 billion.
Shares of 393 companies were traded. At the end of the day, 214 stocks closed higher, 158 declined and 21 remained unchanged.
K-Electric was the volume leader with 39.3 million shares, gaining Rs0.24 to close at Rs3.39. It was followed by Pak Elektron with 33.5 million shares, gaining Rs1.37 to close at Rs30.44 and Maple Leaf Cement with 25.3 million shares, losing Rs0.23 to close at Rs30.55.
Foreign institutional investors were net sellers of Rs2.1 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.