Market watch: KSE-100 rebounds on rupee recovery, LSM growth

Benchmark index rises 203.74 points to settle at 46,920.46

KARACHI:

Investors’ sentiment turned bullish on Thursday and a fresh buying spell helped the KSE-100 index post a rebound of 204 points.

Market participants took cue from partial recovery of the rupee against the US dollar coupled with modest growth in large-scale manufacturing (LSM).

Market players believed that the State Bank of Pakistan injected liquidity into the currency market to lend support to the local currency. Besides, a 2.25% expansion in LSM in July 2021 on a year-on-year basis fuelled the rally.

Despite the optimistic mood, automobile, cement and fertiliser sectors remained the major laggards. On the flip side, index-heavy banks and exploration and production companies attracted investor interest.

Earlier, trading began with a decline, however, appreciation of the rupee in early trading propped up the stock market. The index climbed steadily for the rest of the session and closed near the 47,000-point barrier.

At close, the benchmark KSE-100 index recorded an increase of 203.74 points, or 0.44%, to settle at 46,920.46.

In a report, Arif Habib Limited stated that after posting losses over the past two sessions, the index bounced back and made a recovery of 242 points. It closed up by 204 points.

The technology sector rebounded and exploration and production stocks also posted gains.

Cement firms and oil and gas marketing companies remained under selling pressure whereas nominal gains were witnessed in steel, chemical and banking sectors’ stocks.

Sentiment at the bourse improved after the rupee started recovering against the dollar and posted partial gains in the inter-bank market after the State Bank’s perceived intervention, the report said.

JS Global analyst Maaz Mulla said that Pakistani equities finally saw some daylight after two consecutive negative sessions as the KSE-100 closed at 46,920, posting a gain of 204 points.

Total traded volume jumped 22% day-on-day to 405 million shares.

In the exploration and production sector, Pakistan Petroleum (+1.9%), Oil and Gas Development Company (+1.8%) and Pakistan Oilfields (+0.2%) managed to close in the green.

Investor interest was witnessed in the textile sector where Gul Ahmed Textile Mills (+7.2%), Interloop Limited (+3%), Nishat Mills (+2.2%) and Nishat Chunian (+0.9%) moved higher.

Citi Pharma (+1.2%) in the pharmaceutical sector released material information stating that an agreement had been signed between Citi Pharma and the deputy governor of Namangan, Uzbekistan for establishing a wholly owned subsidiary of the company in the Central Asian state. The company will produce syrups, liquids and psychotropic products.

 “Going forward, we recommend investors to book profit and wait for further buying,” the analyst said.

Overall trading volumes rose to 405.2 million shares compared with Wednesday’s tally of 332.8 million. The value of shares traded during the day was Rs16.5 billion.

Shares of 518 companies were traded. At the end of the day, 275 stocks closed higher, 222 declined and 21 remained unchanged.

Service Fabrics (R) was the volume leader with 61.6 million shares, gaining Rs0.57 to close at Rs2.74. It was followed by WorldCall Telecom with 44.9 million shares, gaining Rs0.2 to close at Rs3.32 and TRG Pakistan with 32.3 million shares, gaining Rs9.15 to close at Rs176.66.

Foreign institutional investors were net sellers of Rs614 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.