Market watch: Budget approval lifts KSE-100 upward

Benchmark index rises 135.42 points to settle at 47,137.77

KARACHI:

Buoyed by the approval of Finance Bill in parliament, the Pakistan Stock Exchange staged a rebound on Tuesday as the KSE-100 index rose 135 points.

Investor spirit turned positive post-approval of the federal budget and they assumed fresh positions. Market participants remained optimistic about the new fiscal year beginning July 1.

Index heavyweight automobile, cement, bank and refinery sectors generated substantial buying activity.

On the flip side, an overnight dip in global oil prices battered the exploration and production sector, which closed entirely in the red.

Earlier, the trading session kicked off with a spike and the market crossed the 47,500-point mark for a brief period. Cherry-picking was witnessed at the bourse for most part of the day.

A selling spree emerged towards the end, which partially erased the gains. Nevertheless, the index managed to end the day on a positive note.

At close, the benchmark KSE-100 index recorded an increase of 135.42 points, or 0.29%, to settle at 47,137.77.

Arif Habib Limited, in its report, stated that the market traded positive with expectation of approval of the federal budget by parliament.

“At the beginning of the session, the index moved up and gained 300 points in a few minutes,” it said. “The index added a total of 506 points during the session and closed up by 135 points.”

The exploration and production sector saw heavy selling with a decline in stock prices below previous day’s closing levels.

Technology, bank and steel sectors contributed positively to the market, especially TRG Pakistan which saw active buying in response to the corporate briefing held on Monday.

JS Global analyst Maaz Mulla said bulls made a comeback as the KSE-100 index gained 506 points in intra-day trading. However, it lost strength due to profit-taking, closing at 47,138 (+135 points).

Total traded volume stood at 581 million shares where Silkbank (+9%), Hascol Petroleum (-9.2%), WorldCall Telecom (+2.6%), TPL Corp (+6.1%) and TRG Pakistan (+4.5%) accounted for 43% of the aggregate volume.

A recovery was witnessed in cement, bank and steel sectors where Flying Cement (+3%), Pioneer Cement (+2.1%), Lucky Cement (+0.4%), MCB Bank (+0.2%), Meezan Bank (+2%), HBL (+1.4%), International Industries (+1.8%), Crescent Steel and Allied Products (+1%), Amreli Steels (+0.6%) and Aisha Steel Mills (+2.2%) were the major movers.

The auto sector followed the rising trend where Indus Motor Company (+4%), Pak Suzuki Motor Company (+1.1%) and Honda Atlas Cars (+1%) gained ground.

Investor interest was witnessed in TRG Pakistan (+4.5%) in the technology sector.

“Going forward, we expect the market to behave in a similar fashion and recommend investors to view any downside as a buying opportunity in steel, cement and refinery sectors,” the analyst said.

Overall trading volumes dropped to 580.8 million shares compared with Monday’s tally of 655.1 million. The value of shares traded during the day was Rs17.2 billion.

Shares of 406 companies were traded. At the end of the day, 248 stocks closed higher, 131 declined and 27 remained unchanged.

Silkbank was the volume leader with 69.2 million shares, gaining Rs0.17 to close at Rs2.06. It was followed by Hascol Petroleum with 66.2 million shares, losing Rs0.89 to close at Rs8.81 and WorldCall Telecom with 55.7 million shares, gaining Rs0.1 to close at Rs3.91.

Foreign institutional investors were net sellers of Rs302.49 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.