Market watch: Bulls toss index above 42,000 mark

Benchmark KSE-100 index rises 362.11 points to settle at 42,027.38

KARACHI:

Despite a tumultuous session, bulls maintained their grip on the Pakistan stock market for the third consecutive session and the benchmark KSE-100 index powered past the 42,000-point mark in a rally driven by easing inflation in the country.

The Consumer Price Index (CPI) decelerated to 8.3% in November 2020, according to the Pakistan Bureau of Statistics.

The uptrend in the stock market was also fuelled by news of increase in cement prices in the northern region, which acted as a catalyst and spurred interest in cement stocks. Furthermore, a recovery in international crude oil prices following approval by Britain of a Covid-19 vaccine strengthened investors’ interest.

Though the investors cheered the low inflation reading, there were worries about rising number of coronavirus cases, which triggered sell-off at regular intervals in the market.

At close, the benchmark KSE-100 index recorded an increase of 362.11 points, or 0.87%, to settle at 42,027.38 points.

Arif Habib Limited, in its report, stated that the market carried the momentum of the past couple of sessions. “The index finally crossed the 42,000 mark,” it added.

“The cement sector led the index on the back of increase in cement prices per bag in the northern region, which coincided with a brisk buying activity in small and mid-caps in auto, chemical, steel, refinery and miscellaneous sectors that pushed the index up by 409 points,” the report said.

Moreover, the international crude oil prices started recovering on news that the UK had announced an expeditious delivery of Covid-19 vaccine.

Among the sectors, major gainers were auto (+75 points), banks (+57 points), technology (+38 points), cement (+34 points) and power (+31 points).

Individually, stocks that contributed positively to the index included Bank AL Habib (+42 points), TRG Pakistan (+41 points), Millat Tractors (+40 points), Hubco (+24 points) and Lucky Cement (+23 points).

Stocks that contributed negatively were Pakistan Petroleum (-14 points), Packages Limited (-5 points), HBL (-4 points), EFU General Insurance (-3 points) and Kohinoor Textile Mills (-3 points).

JS Global analyst Danish Ladhani said the KSE-100 index touched intra-day high of +409 points and closed at 42,027, up 362 points.

On the news front, Hubco offered the federal government to purchase its plant worth Rs65 billion.

“Moreover, global pharmaceutical companies Pfizer and BioNTech filed for European Union approval for their coronavirus vaccine,” he stated, adding “inflation eased to 8.3% in November, from 8.9% in October, showed data released by the Pakistan Bureau of Statistics.”

A total of 477 million shares were traded. Top contributors to the total volume were Unity Foods (-1%), TRG Pakistan (+5.7%), Pakistan Refinery (+1.1%), Maple Leaf Cement (+0.1%), Hum Network (+0.3%), Hascol Petroleum (+2.4%), Pakistan International Bulk Terminal (+1.2%) and Aisha Steel (+4%) with a cumulative 226 million shares changing hands.

Activity was witnessed in all sectors where Millat Tractors, NetSol and National Refinery were the major movers. “Moving forward, we recommend investors to book profit on strength and consider any downside as an opportunity to buy on dips,” the analyst said.

Overall, trading volumes fell to 476.9 million shares compared with Tuesday’s tally of 489.6 million. The value of shares traded during the day was Rs20.4 billion.

Shares of 403 companies were traded. At the end of the day, 242 stocks closed higher, 125 declined and 36 remained unchanged.

Unity Foods was the volume leader with 39.8 million shares, losing Rs0.27 to close at Rs27.20. It was followed by TRG Pakistan with 38.6 million shares, gaining Rs3.85 to close at Rs71.25 and Pakistan Refinery with 34.6 million shares, gaining Rs0.22 to close at Rs19.63.

Foreign institutional investors were net sellers of Rs1.2 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.