Market watch: Stocks rally on strong investor interest

KARACHI:

The bullish rally continued to grip the stock market on Tuesday and helped the KSE-100 index to advance 266 points as it shot past 41,300 points, driven by strong investor sentiment.

A projected low inflation reading fuelled investors’ interest in the market and supported the uptrend. Additionally, market participants cherished the release of Rs105.4 billion for ongoing and new development projects under the Public Sector Development Programme (PSDP), which sparked fresh buying at the bourse.

Index-heavy cement, fertiliser and refinery sectors turned attractive and spurred buying activity.

Earlier, trading started on a positive note and the index recorded steady gains till midday. A few dips were seen intermittently but market participants were quick to rectify them.

The positive trajectory picked up some pace in final hours of trading, which pushed the market further up.

At close, the benchmark KSE-100 index recorded an increase of 266.33 points, or 0.65%, to settle at 41,377.26 points.

Arif Habib Limited, in its report, stated that the bull-run continued in the market, which added another 290 points during the session and closed up by 266 points.

The cement sector contributed the most to the advance of the index, where Lucky Cement, Pioneer Cement and Maple Leaf Cement performed well.

The chemical sector also saw improved performance with Sitara Peroxide and Descon Oxychem hitting their upper circuits and a similar performance was noted in Lotte Chemical and Engro Polymer.

Pakistan State Oil (PSO) declared its financial results at the opening bell, posting a loss in the bottom line. The company’s stock sustained selling pressure but reverted to its opening price by the end of the session.

The vanaspati sector topped the volumes with trading in 135.9 million shares, followed by cement firms (113.8 million) and cable companies (60.5 million).

JS Global analyst Maaz Mulla said the benchmark KSE-100 index closed in the positive zone at 41,377, up 0.65%, after touching a high of +291 points.

“The equity market remained bullish during the trading session with cement and steel sectors being the major players,” he said.

Among cement stocks, Pioneer Cement (+4.2%), DG Khan Cement (+3%), Maple Leaf Cement (+2.8%) and Cherat Cement (+1.2%) were the major movers.

Similarly, Ittefaq Iron Industries (+7%), Amreli Steels (+4.9%), International Steels (+2.3%) and Aisha Steel Mills (+1.6%) from the steel sector gained ground compared to the previous day’s close.

The refinery sector also enjoyed the upward trend where Pakistan Refinery (+7.5%), Attock Refinery (+2%) and National Refinery (+0.8%) remained in the green region.

Traded value stood higher at $131 million, up 34% while volumes came in at 759 million shares, up 68%.

“Going forward, we expect the market to depict a similar trend, therefore, we recommend investors to see any downside in the market as an opportunity to buy cement, steel, consumer and bank stocks,” the analyst said.

Overall, trading volumes soared to 759.4 million shares compared with Monday’s tally of 451.7 million. The value of shares traded during the day was Rs21.7 billion.

Shares of 424 companies were traded. At the end of the day, 278 stocks closed higher, 125 declined and 21 remained unchanged.

Unity Foods (R) was the volume leader with 91.2 million shares, gaining Rs0.5 to close at Rs3.86. It was followed by Pak Elektron with 47.5 million shares, gaining Rs2.62 to close at Rs37.58 and Unity Foods with 45.8 million shares, gaining Rs0.86 to close at Rs14.72.

Foreign institutional investors were net sellers of Rs278.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.