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Market watch: KSE-100 extends gains, climbs 252 points

Investors at the Pakistan Stock Exchange kept alive the buying momentum from previous sessions as the KSE-100 index rose 252 points in a see-saw session on Monday mainly due to optimism over progress on the circular debt issue.

Though the market gave the look of a roller coaster ride, the index traded in the positive zone throughout the session.

Index-heavy sectors attracted modest activity. Cement and steel sectors endured heavy selling pressure, however, buying interest in the oil and energy sectors offset the losses and lifted the index.

Earlier, trading began with a spike and strong investor sentiment helped the index climb over 600 points in early trading, however, some of the gains were wiped off by midday. The market maintained the uptrend for most of the session and closed above 44,500 points.

At close, the benchmark KSE-100 index recorded an increase of 251.66 points, or 0.57%, to settle at 44,686.46 points.

Arif Habib Limited, in its report, stated that the market opened on a positive note and carried the momentum till the end of trading day, especially due to the resolution of circular debt issue, which resulted in strong buying in the energy chain including Hubco, Kapco and PSO.

The exploration and production sector saw continuous buying interest not only due to an increase in international crude oil prices (which jumped 2% during the session) but also due to expectation of release of stuck receivables of Pakistan Petroleum and Oil and Gas Development Company.

Cyclical stocks (cement and steel) saw a slump in prices due to profit-booking. Technology stocks faced selling pressure in the wake of a latest circular from the National Clearing Company of Pakistan for implementing a close-out mechanism for futures contracts as tech stocks mostly comprised open positions in futures contracts, the report said.

JS Global analyst Danish Ladhani said bulls did not pause as the KSE-100 index touched a high of +640 points in the trading session, closing at 44,686, +252 points.

Total volumes for the day stood at 541 million shares, where major contribution came from Pak Elektron (+4.4%), Hubco (+5.5%), Hascol Petroleum (0%), WorldCall Telecom (+7.3%) and TRG Pakistan (-6.5%).

The power sector continued its upward trend from last week where Kapco (+7.5%), Nishat Power (+7.5%), Pakgen Power (+7.5%), and Nishat Chunian Power (+7.5%) closed at their respective upper circuits and Hubco (+5.5%) gained sharply.

The steel sector came under pressure on the back of news of Prime Minister Imran Khan forming a committee that comprised government high-ups and the private sector to look into rising steel bar prices.

Amreli Steels (-1.8%), Agha Steel (-5.5%), Aisha Steel Mills (-2.8%), International Industries (-3.5%), Mughal Iron and Steel Industries (-1.6%) and International Steels (-3.2%) lost ground.

Investors opted to book profits in the cement sector where DG Khan Cement (-3.7%), Maple Leaf Cement (-2.8%), Power Cement (-2.5%), Cherat Cement (-1.8%) and Pioneer Cement (-1.9%) remained in the red.

 “Moving forward, we recommend investors to view any downside as a buying opportunity in the cement and banking sectors,” the analyst said.

Overall, trading volumes decreased to 540.8 million shares compared with Friday’s tally of 642.6 million. The value of shares traded during the day was Rs26.7 billion.

Shares of 412 companies were traded. At the end of the day, 161 stocks closed higher, 231 declined and 20 remained unchanged.

Pak Elektron was the volume leader with 27.4 million shares, gaining Rs1.74 to close at Rs40.87. It was followed by Hub Power Company with 25.4 million shares, gaining Rs4.68 to close at Rs89.95 and Hascol Petroleum with 25 million shares, closing unchanged at Rs15.09.

Foreign institutional investors were net buyers of Rs29 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.

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