Market Watch: Bulls run high ahead of MPC announcement

KARACHI:

The Pakistan Stock Exchange witnessed a positive session at the start of the week, pushing the KSE-100 index above the 46,000 mark and maintaining its bullish run ahead of the anticipated monetary policy announcement scheduled for next week.

The market began with an intraday high of 46,192.70 points but soon began to slump gradually as investors chose to partially book profits and strengthen their positions within the banking sector stocks ahead of the monetary policy. The Pakistani rupee also depreciated against the greenback on Monday, pushing the index further down to an intraday low of 45,872.67 points.

However, factors such as policy announcement speculations, eased political noise, and surging foreign reserves helped maintain the bullish streak, pushing the index above the 46,000 level.

The banking sector largely remained a strong and preferred sector, but the refinery sector also posted modest gains, bouncing back to the spotlight. The bourse closed above the 46,000 mark on a bullish note.

“Stocks closed higher ahead of major earning announcements due this week,” said Arif Habib Commodities, CEO, Ahsan Mehanti. “Speculations on SBP policy announcement on July 31, easing political noise, and surging FX reserves played a catalyst role in bullish close.”

At close, the benchmark KSE-100 index registered a rise of 134.08 points, or 0.29%, and settled at 46,054.81.

Topline Securities, in its report, said that 46,000 was yet another checkpoint PSX passed through on Monday.

On the closing basis, the aforesaid psychological level has been broken after a gap of 15 months.

“During trading hours, the KSE-100 index floated in a band of 324 points, as investors opted to book partial profits in cyclical stocks and further strengthen their positions into banking sector stocks ahead of the Monetary Policy where street view is scattered from ‘Status quo’ to ‘100 bps hike’ in the interest rates,” it observed.

“Banking sector continued to remain the preferred sector too, as MCB, UBL, and MEBL added 116 points. In addition, COLG AND SHEL too contributed positively by adding 34 points,” Topline added.

Arif Habib Limited (AHL) reported new rally highs for all KSE-100, KSE-30, and KSE-ALL, and a +46K close for the KSE-100.

“Banks remained strong with intra-sector rotation seen today with NBP PA (+3.45%) catching a bid, MCB PA (+3.12%),” it said, adding that momentum remains strong in Pakistan equities with support now building at 45,000.

JS Global analyst

Muhammad Shuja Qureshi reported that the market posted a gain of 134 points to close above the 46,000 level at 46,055. “Once again, the banking sector led the rally whereas the refinery sector also bounced back to post decent gains.”

“Going forward, corporate announcements and policy level developments would keep investor interest alive in selective stocks,” the analyst added.

Overall trading volumes increased to 299.07 million shares compared to Friday’s tally of 504.5 million. The value of shares traded during the day was Rs8.14 billion.

Shares of 337 companies were traded. At close, 147 stocks closed higher, 175 declined, and 15 remained unchanged. WorldCall Telecom was the volume leader with trading in 35.9 million shares, losing Rs0.05 to close at Rs1.41.

It was followed by K-Electric with 32.4 million shares, gaining Rs0.12 to close at Rs2.15, and Unity Foods with 31.5 million shares, gaining Rs0.58 to close at Rs27.40.

Foreign investors were net buyers of Rs258.9 million worth of shares, according to the NCCPL.