Market watch: Bulls dominate first session of FY22

Benchmark KSE-100 index rises 444.55 points to settle at 47,800.57


Our Correspondent July 01, 2021
Shares of 421 companies were traded. At the end of the day, 302 stocks closed higher. PHOTO: FILE

KARACHI:

The first trading session of fiscal year 2021-22 ended on a bullish note as investors remained optimistic about improvement in economic indicators.

As a result, the benchmark KSE-100 index breached the psychological barrier of 47,500 points once again after registering a rise of 445 points.

A slowdown in monthly inflation, which returned to single digit at 9.7% in June 2021, painted a bright picture of the economy and sparked across-the-board buying. Average inflation for full fiscal year 2020-21 came in at 8.9%, which was well in line with the State Bank of Pakistan’s projection of 7-9%.

Index-heavy automobile, cement, oil and gas exploration, oil marketing and refinery sectors generated substantial buying activity and closed in the green.

Earlier, trading began with a spike and the index remained in the green zone throughout the day. Investors were confident about growth prospects in FY22 that aided the uptrend.

At close, the benchmark KSE-100 index recorded an increase of 444.55 points, or 0.94%, to settle at 47,800.57.

A report of Arif Habib Limited stated that the market performed well on the first day of FY22, adding a total of 487 points to the board, and maintained the momentum by the session’s end. It closed up by 445 points.

Profit-booking by institutions in the past couple of sessions in the wake of close of FY21 with decent returns left the institutions with deployable funds that would likely be routed back to equities in the coming days.

Buying activity was observed across the board with technology, cement and banking stocks contributing the most.

Positive news on the economic front, including textile sector posting a healthy export growth, kept the momentum alive, the report said.

JS Global analyst Muhammad Mubashir said optimism continued at the bourse as the benchmark index added 445 points and closed at 47,801 on the first day of new fiscal year. Traded volumes increased by 38% to 760 million shares.

The headline inflation for June 2021 was announced, which came in at 9.7% year-on-year vs 10.87% year-on-year in May 2021.

The cement sector was in the limelight where Lucky Cement (+2.8%), DG Khan Cement (+2.1%), Maple Leaf Cement (+1.1%), Fauji Cement (+1%) and Pioneer Cement (+0.5%) closed in the positive zone.

In other news, NAB has reportedly allowed the Power Division to process payments to the independent power producers (IPPs) established under the Power Policy 2002.

Moreover, the oil refining policy is expected to be presented to the cabinet soon.

“We expect the market to maintain the positive trend and recommend investors to buy on dips in construction and refinery sectors,” the analyst said.

Overall trading volumes rose to 760 million shares compared with Wednesday’s tally of 549.7 million. The value of shares traded during the day was Rs16.3 billion.

Shares of 421 companies were traded. At the end of the day, 302 stocks closed higher, 107 declined and 12 remained unchanged.

WorldCall Telecom was the volume leader with 199.5 million shares, gaining Rs0.14 to close at Rs4.1. It was followed by Silkbank with 51.4 million shares, losing Rs0.01 to close at Rs2 and TPL Corp with 48.3 million shares, losing Rs0.52 to close at Rs19.03.

Foreign institutional investors were net sellers of Rs219.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.

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