Market watch: Cheer over vaccine news lifts KSE-100

Benchmark index rises 369.01 points to settle at 41,153.05

KARACHI:

Investors woke up to the encouraging news of Covid-19 vaccine, which triggered a rally in all equity markets.

Drugmakers Pfizer and BioNTech said on Monday that an experimental Covid-19 vaccine was more than 90% effective based on initial trial results. The news also had an impact on Pakistan’s bourse that extended a rally from the previous session and rose 369 points.

The global oil market cheered the news and skyrocketed over 8% on Monday. Resultantly, both oil sectors at the domestic bourse closed with handsome gains.

The pharmaceutical sector remained in the limelight and multiple stocks ended the session with considerable gains.

Vaccine news helped the KSE-100 index to spike as soon as trading began and climb over 800 points in the first hour. However, political noise combined with rising virus cases across Pakistan wiped off some of the gains. Nevertheless, strong investor sentiment supported the index to close above 41,000 points.

At close, the benchmark KSE-100 index recorded an increase of 369.01 points, or 0.9%, to settle at 41,153.05 points.

A report of Arif Habib Limited stated that Pfizer’s announcement of Covid-19 vaccine turned global markets positive with the hope of resumption of business activities similar to pre-Covid levels.

“International crude oil prices went through the roof by jumping +8% day-on-day, whereas US markets went up 5% and closed +2.5%,” it said. “Regional markets followed suit, however, the jump in indices averaged 1.5%.”

Pakistan’s bourse reacted positively as well, although there was much less exuberance.

Buying activity was more pronounced in exploration and production stocks, followed by banks and oil and gas marketing companies, whereas fertiliser stocks went down by the close of session.

Overall, the KSE-100 index posted an increase of 813 points and closed the session up by 369 points, the report said.

JS Global analyst Maaz Mulla said a recovery was witnessed at the Pakistan Stock Exchange as investors reacted to positive developments overnight on the coronavirus vaccine front.

The market hit intraday high of +813 points and closed at 41,153, up 369 points.

TRG Pakistan (-5.4%), Pakistan Refinery (+1.8%), Al Shaheer Corporation (+6.3%) and Unity Foods (-1.4%) led the volumes with a cumulative 97 million shares changing hands throughout the day.

The pharmaceutical sector gained ground on the back of vaccine hopes. GlaxoSmithKline (+3.1%), Ferozsons Laboratories (+0.6%) and AGP Limited (+0.7%) were major gainers of the sector.

The banking sector closed higher where UBL (+5.3%), MCB (+1.1%) and HBL (+0.3%) were the major movers.

Pakistan Petroleum (+4.8%), Oil and Gas Development Company (+4%) and Pakistan Oilfields (+4.9%) were the major movers of the exploration and production sector as crude oil prices recovered in the international market.

From the steel sector, International Steels (+2.2%) and Aisha Steel Mills (+0.9%) increased prices of steel products.

“We expect the market to remain bullish ahead, however, with uncertainties amid political noise and increasing virus 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 rose to 356 million shares compared with Monday’s tally of 276.8 million. The value of shares traded during the day was Rs15.1 billion.

Shares of 403 companies were traded. At the end of the day, 204 stocks closed higher, 176 declined and 23 remained unchanged.

TRG Pakistan was the volume leader with 30.9 million shares, losing Rs3.08 to close at Rs54.39. It was followed by Pakistan Refinery with 23.5 million shares, gaining Rs0.35 to close at Rs19.46 and Al Shaheer Corporation with 21.7 million shares, gaining Rs1.21 to close at Rs20.41.

Foreign institutional investors were net sellers of Rs175.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.