PSX recovers as investors cheer blue-chip shares’ valuation

Stocks on Thursday snapped the three-day losing streak as investors booked fresh positions in blue-chips, mainly index heavyweight banks, dealers said.

Analyst Hammad Aman at Topline Securities Ltd said the index recovered on lucrative valuations, mainly led by HBL, UBL and MCB. These banks contributed 106 points to the Index gains.

The Pakistan Stock Exchange’s benchmark KSE 100-share Index closed higher 0.76 percent or 374.15 points to 49,588.30 points. The highest index of the day remained at 49,693.61 points, while the lowest level of the day was recorded at 49,163.91 points. KSE 30-share Index also increased 0.84 percent or 224.55 points to 26,857.39 points.

Turnover decreased 154 million shares to 263.26 million shares. Trading value dropped to Rs14.27 billion from Rs17.46 billion. But, market capital expanded to Rs9.81 trillion from Rs9.73 trillion in the last session. Out of 415 companies active in the session, 260 closed up, 135 ended down and 20 remained unchanged.

Analyst Ahsan Mehanti at Arif Habib Corp said late session pressure was witnessed on widening trade deficit and regulatory measures over margin trading. “Reports of surging fertiliser and cement sales added to the gains,” Mehanti said.

Analyst Ali Raza at Elixir Securities said equities snapped three-day losing streak and closed higher primarily because of gains in notable blue-chips. 

Pharmaceutical sector led morning gains on news that pharmaceutical companies ended strike and reached an agreement with the Punjab government over amendments into Drug Act.

While earnings of Maple Leaf Cement came slightly better than market expectations, it was down 0.3 percent. DG Khan Cement's results were according to the market expectation. However, it also fell one percent. Both the stocks witnessed profit-taking.

Notably, investors cheered Millat Tractors stellar first half earnings. It was up 5.0 percent. The tractor maker also disclosed intentions for joining the recent joint venture between Hyundai and Nishat Mills to assemble automobiles.

“Wider market is likely to see pressure and volatility till the 50,000-point level,” Raza said. “So, unless institutional activity strongly picks up or earnings of major stocks in the coming days surprise the participants we expect the market to remain range-bound.”

Highest increase was recorded in Hinopak Motor. Its share price rose Rs77.75 to Rs1,699/share. Wyeth Pak Ltd was up Rs56 to Rs4,426/share. Major decrease was noted in shares of Bata (Pak). Its stock value fell Rs150 to Rs3,950/share, followed by Service Industries Ltd that was down Rs45.22 to Rs1,472/share.

Significant turnover was recorded in stocks of Aisha Steel Mill, Dost Steels Ltd, TRG Pak Ltd, Dewan Cement, International Steels Ltd, K-Electric Ltd, Ghani Automobile, Power Cement Ltd, Engro Polymer and Lotte Chemical.

Aisha Steel Mill remained the volume leader with 21.72 million shares with an increase of Rs1.30 to Rs27.38/share. It was followed by Dost Steels Ltd with 21.42 million shares with an increase of 89 paisas to Rs15.94/share.  Turnover in the future contracts decreased to 40.75 million shares from 56.27 million shares traded in the previous session.