Stocks extend gains as earnings pick up

Stocks extended gains into a second session on Thursday as earnings season heated up, while blue-chip shares rose on better retail data, dealers said.

Analyst Maaz Mulla at JS Research said positivity in the market has stemmed from attractive rates of many stocks, attracting investors into fresh buying.  “However, on the bank of lack of substantial market triggers we recommend investors to book profits at high levels,” Mulla said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share index gained 0.88 percent or 373.45 points to close at 42,683.57 points. The highest index of the day remained at 42,737.73 points while the lowest level of the day was recorded at 42,167.66 points. KSE-30 Index also increased 0.99 percent or 214.97 points to close at 21,936.20 points. Turnover rose by 44 million shares to 217.12 million shares from 173.81 million shares. Trading value, however, fell slightly to Rs9.61 billion from Rs9.66 billion while market capital expanded to Rs8.89 trillion from Rs8.83 trillion. Out of 390 companies’ active in the session, 232 closed in green, 130 in red while 28 remained unchanged.

Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed higher on investors’ bet on strong corporate earnings.  “Strong cement sales, oil sales, fertilizer sales for Aug'17, reports for rising textile exports and surging remittances data played a catalyst role in higher close,” Mehanti said.

Elixir Securities in its post market note said the market opened sideways failing to carry Wednesday’s momentum, however, gradually inched up on reported institutional interest primarily in financials, oils and select index names on hopes of better flows given FTSE report, which expected an increase in the foreign activity on Friday.  “We are expecting rally to continue (on Friday) on back of institutional flows with index attempting to test the important resistance level of 43,000 points,” the report said. Domestic cherry-picking helped market to ignore prevailing domestic politics, while comments by the ministry of finance on no further IMF loans in the near-term helped investors to overcome concerns on currency devaluation. Overall, activity in wider market improved considerably with volumes on benchmark KSE All Index crossing 200 million’s mark after remaining muted in last two weeks.

Highest increase was recorded in shares of Nestle Pakistan XD, which rose by Rs177.33 to Rs12,477.33/share, followed by Wyeth Pak Ltd that increased Rs72.68 to Rs2,200/share. Major decline was noted in shares of Unilever Foods, which fell Rs100 to Rs6,400/share, followed by Island Textile that decreased Rs49.34 to Rs937.49/share.

Significant turnover was recorded in stocks of WorldCall Telecom, Azgard Nine, Aisha Steel Mill, Bank Al-Falah, Sui Southern Gas Company Limited, TRG Pak Ltd, Telecard Limited, Jahangir Siddiqui Co, Sui Northern Gas Pipelines Ltd and Bank of Punjab. WorldCall Telecom remained the volume leader with 47.96 million shares with an increase of 58 paisas to Rs3.48/share. It was followed by Azgard Nine with 22.94 million shares with an increase of 29 paisas to Rs13.68/share. Shares’ turnover in the future contracts fell to 35.24 million shares from 44.03 million shares traded in the previous session.