Market watch: Bulls roar back, lift KSE-100 by 305 points

Benchmark index gains 0.77% to settle at 39,882.78

KARACHI:

Bulls returned to the bourse on Wednesday after giving in to selling pressure a day earlier and pushed the benchmark index close to the 40,000-point mark.

Stocks in the cement sector outshined others amid reports of rising cement prices coupled with encouraging sales data for July 2020 when cement offtake soared a healthy 37.8% to 4.8 million tons from 3.5 million tons in the same month of previous year.

Moreover, the exploration and production sector added to the gains on the back of rising international crude oil prices.

Earlier, trading began on a positive note at the bourse but selling pressure emerged soon after, which wiped out the gains and took the index into negative territory. However, the bulls jumped back and recouped all the losses including those suffered by the market a day ago.

At close, the benchmark KSE-100 index recorded an increase of 305.16 points, or 0.77%, to settle at 39,882.78 points.

Arif Habib Limited, in its report, stated that the market opened on a positive note with +73 points and carried the momentum on the back of banking sector. However, selling activity brought the index down by 152 points, erasing the gains posted earlier in the session.

“The market bounced back on a news report about increase in cement prices per bag, which helped several stocks of the sector to hit their respective upper circuits,” it said.

Exploration and production stocks took cue from increasing international crude oil prices and closed the session in the green.

However, the banking sector faced some resistance, which kept pressure on bank stocks.

The cement sector led the volumes with trading in 136 million shares, followed by technology firms (62 million) and food companies (47.5 million).

Sectors contributing to the performance included cement (+164 points), exploration and production (+55 points), technology (+37 points), textile (+22 points), fertiliser (-23 points) and banks (-21 points).

Stocks that contributed positively to the index were Lucky Cement (+49 points), TRG Pakistan (+37 points), DG Khan Cement (+28 points), Maple Leaf Cement (+25 points) and Cherat Cement (+22 points).

Stocks that contributed negatively included UBL (-17 points), Engro (-16 points), Pakistan Tobacco (-14 points), Bank AL Habib (-14 points) and Fauji Fertiliser Company (-13 points).

JS Global analyst Danish Ladhani said the benchmark KSE-100 index closed in the positive zone, after hitting a high and low of +362 and -152 points respectively.

“The equity market remained bullish with cement and exploration and production stocks being the major players,” he stated.

OGDC (+1.3%) and Pakistan Petroleum (+0.5%) in the exploration and production sector gained ground. Pakistan Oilfields (+1.8%) was the major gainer in the sector as crude oil prices rose in the international market on the back of a drop in US stockpiles, Ladhani added.

Furthermore, Lucky Cement (+2.9%), TRG Pakistan (+7.4%), DG Khan Cement (+5.6%), Maple Leaf Cement (+7%) and Cherat Cement (+7.3%) were among the major index movers.

Traded value stood slightly lower at $133 million, down 16% while volumes came in at 502 million shares, down 15%.

“Going forward, we expect the market to remain volatile with intra-day corrections and recommend investors to sell on strength,” the analyst said.

Overall, trading volumes decreased to 502 million shares compared with Tuesday’s tally of 594 million. The value of shares traded during the day was Rs22.3 billion.

Shares of 405 companies were traded. At the end of the day, 248 stocks closed higher, 139 declined and 18 remained unchanged.

Maple Leaf Cement was the volume leader with 38.5 million shares, gaining Rs2.28 to close at Rs35.03. It was followed by Power Cement with 37.5 million shares, gaining Re1 to close at Rs9.73 and TRG Pakistan with 34.6 million shares, gaining Rs3.51 to close at Rs51.25.

Foreign institutional investors were net buyers of Rs104.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.