Investor sentiment turned slightly bullish at the stock exchange on Monday, fuelled by hopes for a lower inflation reading for August 2020, which aided the market to close up by 55 points in a tumultuous trading session.
Market participants pinned their hopes on an expected drop in the inflation rate for August, which may lead to a further reduction in the policy rate in the monetary policy announcement in September.
In addition to that, the rupee staged a modest recovery against the US dollar in the past few days, lending support to the market. The Central Directorate of National Savings revised upwards profit rates on saving schemes, which acted as a catalyst for the positive close.
The cement sector performed well where most of the stocks ended the day with some gains.
Earlier, upbeat investor sentiment helped the market to kick off trading on a positive note and the index climbed over 200 points within the first hour. However, the bourse turned volatile and most of the gains were wiped off in the next few minutes.
Uncertainty persisted throughout the session and restrained the market from posting massive gains. Nevertheless, the optimistic mood helped the bourse to close in the green.
At close, the benchmark KSE-100 index recorded an increase of 54.71 points, or 0.13%, to settle at 41,110.93 points.
Arif Habib Limited, in its report, stated that the market gained a total of 255 points during the session, however, due to selling pressure in banking and fertiliser sectors the index saw erosion of almost all the gains.
The index closed up by 55 points, supported by an increase in stock prices of Pakistan Petroleum Limited (PPL) and Oil and Gas Development Company (OGDC) in the last half hour.
The cement sector performed well, which saw DG Khan Cement, Lucky Cement and Kohat Cement contribute positively to the index.
The cement sector recorded the highest trading volume with 81.4 million shares changing hands, followed by banks (71.7 million) and technology firms (61.1 million).
Among individual stocks, BankIslami topped the volumes with around 41 million shares, followed by TRG Pakistan (40 million) and Power Cement (R) (32 million), the report said.
JS Global analyst Maaz Mulla said bulls dominated the KSE-100 index, which touched a high of +255 points. “However, later in the day, the market declined and closed at 41,111, up 55 points,” he said.
Volumes for the day accumulated to 452 million shares as BankIslami (+10.5%), TRG Pakistan (-7.2%), Pakistan Refinery (+7.5%), Hascol Petroleum (+2%) and Fauji Cement (+0.9%) led the charts with a cumulative 127 million shares changing hands.
In the steel sector, International Steels (+2.2%) and Aisha Steel Mills (+2.4%) further increased their product prices by Rs2,000 per ton, effective September 1, 2020. It was the third increase in 1QFY21, cumulatively amounting to Rs8,000 per ton.
The cement sector gained ground where DG Khan Cement (+2.5%), Kohat Cement (+1.4%), Lucky Cement (+1.5%), Fauji Cement (+0.9%) and Maple Leaf Cement (+0.6%) were the major movers.
Pressure was witnessed in the banking sector where HBL (-0.6%), UBL (-1.5%), MCB (-0.4%) and JS Bank (-1.8%) were in the negative zone.
“Going forward, we expect the equity market to trade sideways in the absence of any immediate triggers. We recommend investors to sell on strength,” the analyst said.
Overall, trading volumes soared to 451.7 million shares compared with Friday’s tally of 238.6 million. The value of shares traded during the day was Rs16.3 billion.
Shares of 413 companies were traded. At the end of the day, 198 stocks closed higher, 196 declined and 19 remained unchanged.
BankIslami was the volume leader with 40.9 million shares, gaining Rs0.94 to close at Rs9.93. It was followed by TRG Pakistan with 40.1 million shares, losing Rs4.53 to close at Rs58.68 and Power Cement (R) with 32 million shares, losing Rs0.1 to close at Rs0.05.
Foreign institutional investors were net sellers of Rs130.5 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
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