Market watch: Stocks close at fresh peak as banks play role of catalyst

Benchmark KSE 
100-share Index 
rises 271.82 points

Benchmark KSE 100-share Index rises 271.82 points

KARACHI: Pakistan equities rose on the first trading day of the week and the month with the benchmark index setting a fresh all-time high helped by gains in financial, exploration and production (E&P) stocks and select index names.

The Pakistan Stock Exchange’s benchmark KSE 100-share Index rose 0.69% or 271.82 points on Monday to end at 39,800.64.

Elixir Securities, in its report, said the day kicked off on a positive note with index-heavy E&P stocks supporting the early ride as participants tracked the weekend recovery in global crude prices.

Oil and Gas Development Company (+0.2%) erased intra-day gains to close little changed while Pakistan Oilfields (+2.1%) and Pakistan Petroleum (+1.7%) remained steady and contributed to the gains.

“However, financial stocks led the show with the whole sector coming back in the limelight and drawing institutional interest after the central bank decided to leave the policy rate unchanged over the weekend,” the report said.

Index-heavy MCB Bank (+1.8%) contributed the most to the day’s gains, followed by National Bank of Pakistan (+5%) that hit the upper price limit ahead of earnings announcement.

Moreover, United Bank Limited (+1.2%) traded at its record high after announcing stellar earnings last week.

“At the day’s close, the KSE-100 index was up 0.7% with no serious intra-day profit-taking seen to hurt the trajectory,” said the report.

“We see institutional flows and earnings season continuing to guide the wider market and expect the benchmark index to cross 40,000 points before the end of this week,” commented Elixir Securities analyst Ali Raza.

Meanwhile, JS Global analyst Ahmad Saeed Khan said positivity prevailed in the market as the index surged around 272 points to close at an all-time high of 39,800 with trading volumes of over 204 million shares.

“Gainers were led by the banking sector that rallied on the back of State Bank of Pakistan’s (SBP) decision to keep the monetary policy unchanged at 5.75% over the weekend. The sector comfortably stayed within the green zone, where the biggest index movers were NBP and MCB.”

Khan said the Consumer Price Index for July 2016 stood at 4.12% as opposed to the general consensus of around 3.8%, adding the higher-than-expected inflation further strengthened the case for an interest rate rise in the future.

The sugar sector rallied on the back of news that prices had surged to Rs76-78 per kg. Top index movers of the sector were JDW Sugar (+1.5%) and Mehran Sugar Mills (+5%).

“Moving forward, we remain bullish on the market and expect it to break the psychological level of 40,000 points,” said Khan.

Trade volumes rose to 204 million shares compared with Friday’s tally of 145 million.

Shares of 380 companies were traded. At the end of the day, 241 stocks closed higher, 118 declined while 21 remained unchanged. The value of shares traded during the day was Rs10.7 billion.

Sui Northern Gas Pipelines was the volume leader with 15.2 million shares losing Rs0.17 to finish at Rs44.20. It was followed by K-Electric with 14.2 million shares losing Rs0.09 to close at Rs8.14 and TRG Pakistan with 12.6 million shares gaining Rs0.80 to close at Rs35.67.

Foreign institutional investors were net sellers of Rs127 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.

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