Market watch: KSE-100 gains slightly in range bound trading

Benchmark index edges up 52.43 points to settle at 40,784.04

KARACHI:

The Pakistan Stock Exchange (PSX) exhibited a turnaround on Monday as the KSE-100 index rose over 200 points in intraday trading before giving up most of the gains and closing with a meagre increase of 52 points.

Market players took positive cue from international equities and oil markets. During the day, Brent crude climbed $1.28, or 3.2%, to $40.73 a barrel and US West Texas Intermediate crude was at $38.40, up $1.26, or 3.4%.

While investors cheered clarity in the US presidential election where Joe Biden was declared winner, overall sentiment remained mixed as market players were concerned over rising cases of coronavirus in the country and globally.

Earlier, the market opened on a positive note and touched the intra-day high within minutes but battered sentiment over the second wave of Covid-19 dragged the index into negative territory later. However, the index still managed to recover and close with a slight gain.

At close, the benchmark KSE-100 index recorded an increase of 52.43 points, or 0.13%, to settle at 40,784.04 points.

Arif Habib Limited, in its report, stated that the market traded in a range of +212 points and -135 points. It closed the session in the green. Overall trading volumes remained thin compared with the volumes reported in the previous quarter or so.

“Banking, fertiliser and offboard stocks largely contributed to the activity,” it said, adding, “in the banking sector, HBL and MCB posted price gains.”

Overnight positivity in US stock futures, followed by regional markets, helped investors take a positive view, though muted, on the KSE-100 index.

Sectors contributing to the performance included banks (+40 points), technology (+40 points), pharmaceutical (+26 points), chemical (+18 points) and fertiliser (+15 points).

Individually, stocks that contributed positively to the index included HBL (+40 points), TRG Pakistan (+37 points), MCB (+24 points), Colgate-Palmolive (+22 points) and GlaxoSmithKline (+13 points).

Stocks that contributed negatively were Lucky Cement (-21 points), NBP (-10 points), Pakistan Petroleum (-8 points), Oil and Gas Development Company (-8 points) and EFU General Insurance (-6 points).

JS Global analyst Maaz Mulla said the PSX benchmark index blew hot and cold, touching intra-day high of +212 points and stooping to a low of -135 points. It closed at 40,784 (+52 points).

Power Cement (+0.8%), TRG Pakistan (+6.5%) and Pak Elektron (+3.1%) led volumes with a cumulative 88 million shares changing hands throughout the day.

“On the news front, Pakistan may return $2 billion worth of Saudi Arabian loan and is looking for various options to secure more financing aimed at keeping gross official foreign exchange reserves at their current level of over $12 billion,” he stated.

The cement sector declined where Lucky Cement (-1.1%), Cherat Cement (-1.2%), Pioneer Cement (-1.5%) and DG Khan Cement (-0.7%) were the major losers.

The steel sector followed the trend where Aisha Steel Mills (-0.8%), Mughal Iron and Steel (-0.5%), International Industries (-0.2%), Amreli Steels (-0.9%) and Agha Steel (-1.2%) closed in the red region.

“We expect the market to remain bullish ahead, however, with uncertainty amid political noise and increasing corona cases. Hence, we recommend investors to book profit on the higher side and wait for any sharp dip to accumulate value stocks,” the analyst said.

Overall, trading volumes dropped to 276.8 million shares compared with Friday’s tally of 350.4 million. The value of shares traded during the day was Rs9.5 billion.

Shares of 382 companies were traded. At the end of the day, 151 stocks closed higher, 207 declined and 24 remained unchanged.

Power Cement was the volume leader with 36.5 million shares, gaining Rs0.09 to close at Rs10.74. It was followed by TRG Pakistan with 31.9 million shares, gaining Rs3.53 to close at Rs57.47 and Pak Elektron with 19.2 million shares, gaining Rs1.05 to close at Rs35.18.

Foreign institutional investors were net sellers of Rs452.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.