Pakistan’s bourse turned bullish on Tuesday as positive news flow enticed investors to take fresh positions but the KSE-100 index rose just 62 points amid volatile trading.
Market players took positive cue from encouraging remittances data, which soared to a new monthly high in July 2020. In addition to that, the affirmation of Pakistan’s long-term foreign credit rating at ‘B-’ by Fitch Ratings with a stable outlook fuelled the uptrend in the market.
Owing to stability in global crude oil prices, oil sector stocks remained in the limelight and notched up modest gains.
Earlier, trading began with a sharp spike and strong investor sentiment helped the index gain over 300 points in early hours. However, the bourse succumbed to volatility later in the day and wiped off most of the gains to end the session marginally upwards.
At close, the benchmark KSE-100 index recorded an increase of 61.51 points, or 0.15%, to settle at 40,184.01 points.
Arif Habib Limited, in its report, stated that the market opened on a positive note with +224 points and added a total of +312 points to the index.
“Exploration and production and cement sectors played a major role in the positive activity,” it said. “Banking and fertiliser sectors, on the other hand, contributed to the selling pressure.”
International crude oil prices had been stable for quite some time now, which pushed investors to take a long-term view on exploration and production stocks. That resulted in continued ascent of the stocks in the sector.
Cement sector stocks performed well on the back of a stay order that a cement company obtained against probe into a recent increase in cement prices.
The cement sector led the volumes with trading in 83 million shares, followed by power companies (48.8 million) and oil and gas marketing firms (45.8 million), the report said.
JS Global analyst Danish Ladhani said the benchmark KSE-100 index, after hitting a high and low of +312 and -9 points respectively, closed flat at 40,184, up just 61 points.
The market traded sideways with cement and exploration and production stocks being the major movers. DG Khan Cement (+5.9%), Cherat Cement (+7.5%), Lucky Cement (+1.9%), Maple Leaf Cement (+2.9%), Fauji Cement (+2.6%) and Oil and Gas Development Company (+0.8%) closed in the green zone.
“Volumes were seen in the cement sector on rumours of expected increase in prices in the north,” he said. “Moreover, Meezan Bank (-1.3%) in the financial sector announced 2QCY20 result, posting consolidated earnings per share (EPS) of Rs5.07, up 64% year-on-year, with no cash dividend and 10% bonus shares.”
Hubco (+0.5%), Engro (-0.5%), HBL (-1.2%), Engro Fertilisers (-0.8%), Dawood Hercules (+0.8%) and Lucky Cement (+1.9%) were the major index shakers.
Traded value declined 8% to $123 million and volumes stood at 459 million shares, down 12%.
“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 declined to 458.8 million shares compared with Monday’s tally of 522.7 million. The value of shares traded during the day was Rs20.7 billion.
Shares of 400 companies were traded. At the end of the day, 184 stocks closed higher, 196 declined and 20 remained unchanged.
Pakistan International Bulk Terminal was the volume leader with 35.6 million shares, gaining Rs0.45 to close at Rs12.51. It was followed by Pak Refinery with 27.6 million shares, gaining Rs0.41 to close at Rs16.72 and DG Khan Cement with 26.8 million shares, gaining Rs6.21 to close at Rs111.93.
Foreign institutional investors were net sellers of Rs392.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
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