Market watch: Six-day bearish spell ends, bourse rises 567 points

KARACHI:

The Pakistan Stock Exchange (PSX) on Monday reversed its trend after six straight sessions in the negative and the benchmark KSE-100 index once again surpassed the 46,000-point mark.

The bourse displayed bullish tendency on the back of encouraging remittances data announced by the State Bank of Pakistan (SBP) as inflows exceeded $2 billion for the eighth consecutive month in January 2021.

Furthermore, investors pinned their hopes on encouraging financial results in the corporate sector, which had already recorded a hefty growth in the second quarter (Oct-Dec) of current fiscal year 2020-21.

A handsome increase in the large-scale manufacturing index (LSMI), which recorded a growth of 11.4% in December 2020, coupled with strengthening of the rupee against the US dollar kept the investment climate upbeat.

Investors also cheered rising oil prices in the international market and the quarterly results announced by Engro Fertilisers, which kept exploration and production and fertiliser sectors in the positive.

At close, the benchmark KSE-100 index recorded an increase of 567.23 points, or 1.24%, to settle at 46,375.59 points.

Arif Habib Limited, in its report, stated that the market priced in the positive fundamentals related to remittances from overseas Pakistanis as well as the expectation of better quarterly results in the corporate sector, which had so far posted 60% growth.

“The cement sector continued its uptrend on prospects of better results whereas the exploration and production sector benefited from an increase in international crude oil prices,” it said.

Selling pressure, which was witnessed last week from institutional and foreign investors, subsided in banking and fertiliser sectors, which resulted in improved market performance across the board.

Engro Fertilisers declared its financial results along with a dividend, which provided support for the benchmark index from the overall fertiliser sector.

Similarly, HBL and UBL rebounded cautiously during the session, making positive contribution to the benchmark index.

Sectors contributing to the performance included exploration and production (+116 points), technology (+73 points), cement (+67 points), pharmaceutical (+48 points) and banks (+46 points).

Individually, stocks that contributed positively to the index included Oil and Gas Development Company (+54 points), TRG Pakistan (+45 points), Dawood Hercules (+33 points), DG Khan Cement (+33 points) and Systems Limited (+30 points).

Stocks that contributed negatively were Hubco (-8 points), Fauji Fertiliser (-7 points), NBP (-6 points), Kohat Cement (-6 points) and Bank Alfalah (-6 points).

Overall trading volumes rose to 486.4 million shares compared with Friday’s tally of 442.7 million. The value of shares traded during the day was Rs24.8 billion.

Shares of 405 companies were traded. At the end of the day, 246 stocks closed higher, 141 declined and 18 remained unchanged.

WorldCall Telecom was the volume leader with 40.3 million shares, gaining Rs0.14 to close at Rs1.53. It was followed by Maple Leaf Cement with 35.7 million shares, gaining Rs1.89 to close at Rs47.10 and Telecard Limited with 28.7 million shares, gaining Re1 to close at Rs6.63.

Foreign institutional investors were net buyers of Rs14.67 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.