Market watch: Stocks rally amid clarity on political front

Benchmark KSE-100 index surges 382.41 points to settle at 43,933.56

KARACHI:

The Pakistan Stock Exchange made a sharp recovery on Monday, as the benchmark KSE-100 index, after staying in negative territory for most part of the day, surged 382 points and ended just below the 44,000 mark.

Market players finally hoped for an end to the prolonged political turbulence as Prime Minister Imran Khan accepted his ally’s (PML-Q) demands and after Punjab Chief Minister Usman Buzdar tendered his resignation.

However, fresh depreciation of the rupee against the US dollar, which touched a new record low at Rs182.19 in the inter-bank market, capped gains at the bourse.

Earlier, the trading session commenced on a feeble note with investors remaining wary due to the prevailing political turmoil coupled with weakening of the local currency.

The index remained in the negative zone throughout the first half and touched an intra-day low of 43,291 points.

The second half witnessed a gradual recovery as investors cheered some clarity on the political front and the market ended the day in the green zone.

At close, the benchmark KSE-100 index recorded an increase of 382.41 points, or 0.88%, to settle at 43,933.56 points.

Topline Securities, in its report, said that the market opened sideways on the back of rising political noise, when the index fell to an intra-day low of 260 points.

However, recovery was witnessed in the second half when the media reported PM Imran Khan gave the green signal to his ally for an official appointment. As a result, the market hit an intra-day high of 382 points, the report said.

Investor interest was mostly witnessed in the cement sector over the fall in international coal prices, where Lucky Cement, DG Khan Cement and Maple Leaf Cement closed higher.

Telecard Limited led the volumes chart after a notification regarding listing of its subsidiary Supernet Limited as the book building dates were set as April 12-13, 2022, Topline said.

A report of Arif Habib Limited stated that the KSE-100 index stayed in the red territory during the first half of the day due to political uncertainty and further devaluation of Pakistani rupee against the US dollar.

Cement sector was in the limelight due to increase in prices by another Rs15 per bag in the south, except for Karachi, it said.

“Main board activity remained dull. On the flip side, activity continued to remain sideways as the market witnessed hefty volumes in third-tier stocks,” the report said.

“In the last trading hour, value buying was witnessed, which led the index to close in the green zone.”

Sectors contributing to the performance included cement (+120.1 points), commercial banks (+50.4 points), automobile assembler (+48 points), exploration and production (+40.3 points) and pharmaceutical (+20.9 points).

JS Global analyst Mubashir Anis Naviwala said that after a week of range-bound sessions, bulls made a comeback.

Telecard Limited (+6.9%), WorldCall Telecom (+0.6%), Ghani Global Holdings (+4.2%), TRG Pakistan (+1.7%) and K-Electric (+3.8%) cumulatively contributed 28% to the total volumes, he said.

Interest was witnessed in cement and technology stocks.

“Going forward, we might see a range-bound market and recommend investors to avail any downside as an opportunity to buy in cement, technology and exploration and production sectors,” the analyst said.

Overall trading volumes decreased to 132.6 million shares compared with Friday’s tally of 161.9 million. The value of shares traded during the day was Rs4.8 billion.

Shares of 328 companies were traded. At the end of the day, 216 stocks closed higher, 87 declined and 25 remained unchanged.

Telecard Limited was the volume leader with 13.1 million shares, gaining Rs0.72 to close at Rs11.17. It was followed by WorldCall Telecom with 6.7 million shares, gaining Rs0.01 to close at Rs1.57 and K-Electric with 6.6 million shares, gaining Rs0.11 to close at Rs3.02.

Foreign institutional investors were net sellers of Rs298.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.