Market watch: Market soars past 42,000 in extended rally

Benchmark KSE-100 index advances 353.26 points to settle at 42,188.11

KARACHI:

Investor sentiment remained bullish on Thursday that helped the KSE-100 index extend the rally from the previous day to an eight-month high with an advance of 353 points.

Stock market participants made fresh investments after news that the Pakistan Stock Exchange had emerged as the best Asian market. Giving the encouraging news flow, investors now believe that Pakistan’s economy will recover to pre-Covid-19 levels in the next few days.

Market players also expected positive developments from Prime Minister Imran Khan’s scheduled visit to Karachi on Saturday where the premier would announce an economic package for the rain-wrecked city.

Earlier, trading began with a spike and the index managed to cross the 42,000-point mark within the first few minutes. However, some of the gains were wiped off in subsequent hours. In final hours, the market recouped the losses to end the fourth consecutive session in the green.

At close, the benchmark KSE-100 index recorded an increase of 353.26 points, or 0.84%, to settle at 42,188.11 points.

Arif Habib Limited, in its report, stated that after posting high volumes of 837 million shares recently, they increased further to 917 million shares on Thursday, yet another high.

“Investor sentiment has been sky high in recent times, especially on expectation of a positive announcement by the prime minister on his scheduled visit to Karachi on Saturday,” the report said.

“Infrastructure development was expected to positively impact construction sector stocks, which prompted investors to take interest in cement and steel sectors.” Maple Leaf Cement and Pioneer Cement hit their upper circuits.

Among banking sector stocks, NBP continued the uptrend after posting an outstanding result on Wednesday.

Banking sector stocks topped the volumes with trading in 123.8 million shares, followed by cement firms (112 million) and technology companies (93.3 million), the report added.

JS Global analyst Maaz Mulla said continuing Wednesday’s upward trend, the index gained and hit intraday high of +378 points. It closed at 42,188, up 353 points.

Traded volumes inched up to 919 million shares while traded value increased to $160 million.

Top volume stocks of the session were Unity Foods (+4.6%), K-Electric (+0.7%), The Bank of Punjab (+4%) and Maple Leaf Cement (+7.4%) with almost 182 million shares changing hands.

The cement sector continued its upward trend for the third consecutive day where Maple Leaf Cement (+7.4%), Pioneer Cement (+6.9%), Cherat Cement (+2.3%), Fauji Cement (+1.5%) and DG Khan Cement (+1%) were the major movers.

Fertiliser and refinery sectors also enjoyed the rally where Fauji Fertiliser Bin Qasim (+7.5%), Fauji Fertiliser (+0.7%), Engro Fertilisers (+1.1%), National Refinery (+2.2%) and Attock Refinery (+2.8%) were the major movers.

“Going forward, we expect the market to depict a similar trend and recommend investors to see any upside as an opportunity to sell and any downside as an opportunity to buy stocks of cement, steel, consumer and banking sectors,” the analyst said.

Overall, trading volumes surged to 919.5 million shares compared with Wednesday’s tally of 837 million. The value of shares traded during the day was Rs26.5 billion.

Shares of 439 companies were traded. At the end of the day, 322 stocks closed higher, 97 declined and 20 remained unchanged.

Unity Foods was the volume leader with 51.4 million shares, gaining Rs0.69 to close at Rs15.73. It was followed by The Bank of Punjab with 49.8 million shares, gaining Rs0.39 to close at Rs10.08 and K-Electric with 41.8 million shares, gaining Rs0.03 to close at Rs4.33.

Foreign institutional investors were net sellers of Rs295.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.