Market watch: Stocks kick off 2018 with positive finish

KARACHI: The stock market continued its winning streak for the eighth consecutive session, ending the first day of the year on a positive note.

The KSE-100 index witnessed directionless trading in the early hours due to a bank holiday. Volumes also remained thin as investors remained on the sidelines. However, late buying helped the index surge to an intraday high of 40,800 points.

At the end of trading, the benchmark KSE 100-share Index registered an increase of 239.56 points or 0.59% to settle at 40,711.04.

Elixir Securities’ analyst Jawwad Abubakr said that equities closed higher on the first day of 2018 with benchmark KSE-100 Index extending gains to settle over 40,700.

“Market started on a dull note as absence of local banks due to bank holiday and little participation from foreigners led to thin volumes with stocks drifting lower in early hours,” said Abubakr.

However, as the day progressed, a number of stocks witnessed buying and rebounded from their lows; Engro Corp (ENGRO PA +3%), Kot Addu Power (KAPCO PA +3.9%), Pak Electron (PAEL PA +5%).

Latest increase in petroleum products prices fuelled expectations of an early hike in discount rate and propelled select financials to trade positive with Habib Bank (HBL PA +4.3%) contributing most positive points on the KSE-100 index.

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Steels too, remained in limelight after local manufacturers increased HRC prices last month to pass on the impact of PKR depreciation.

Meanwhile, inflation reading announced near day’s end coming little lower than expectations at 4.57% YoY for December 2017 aided positive momentum.

“With political dust settling down, we expect a decent increase in volumes including from foreigners that will guide the market direction in the coming days,” he added.

JS Global analyst Maaz Mulla said the KSE-100 welcomed 2018 on a positive note as the index closed 239 points up.

“Market initially made an intraday low of 302 points, however, during the second half of the day the index recovered to make an intraday high of +344 points to close at 40,711,” Mulla observed.

Interest in heavy-weight stocks including HBL (+4.12%), ENGRO (+2.02%), UBL (+1.11%), LUCK (+1.07%) and DGKC (+1.96%) cumulatively contributed +186 points to the index.

CPI numbers were announced Monday that clocked in at 4.57% YoY for Dec-2017 vs 3.97% YoY in Nov-2017, creating excitement in the banking sector. HBL (+4.12%), BAFL (+2.31%), BAHL (+3.17%) and UBL (+1.11%) closed in the green.

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In other news, ECC allowed export of 35,000 metric tons of urea to Sri Lanka in addition to extension in the date for export of 41,000 metric tons of urea.

Engineering sector gained investors’ interest as DSL (+9.74%) gained to close higher than its previous day close on the back of material information released that the company has conducted successful trial production with start of commercial production likely by the end of Jan-2018.

“We expect institutional flows to continue in coming days on the back of relatively reduced political noise. We recommend buying in cement, steel and oil sectors,” he remarked.

Overall, trading volumes decreased to 118 million shares compared with Friday’s tally of 240 million.

Shares of 329 companies were traded. At the end of the day, 183 stocks closed higher, 122 declined while 24 remained unchanged. The value of shares traded during the day was Rs4.5 billion.

TRG Pakistan was the volume leader with 15.1 million shares, gaining Rs1.16 to close at Rs30.76. It was followed by Dost Steels with 14 million shares, gaining Rs0.98 to close at Rs11.04 and Engro Polymer with 9.5 million shares, losing Rs0.59 to close at Rs27.97.

Foreign institutional investors were net buyers of Rs85.7 million during the trading session, according to data compiled by the National Clearing Company of Pakistan.

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