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November 9, 2019

Index positive streak continues on support from fund houses


November 9, 2019

Stocks remained positive for the seventh consecutive session on Friday after active support from foreign fund houses arrived into the capital market for retaining its emerging market status at the MSCI, dealers said.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks closed higher led by oil, banking and fertiliser scrips on strong earnings outlook.” Investors weigh foreign inflows, surging forex reserves and rupee stability.

“Firm CPI inflation data in October 2019, likely resolve against ongoing political protests, and surging global equities played a catalytic role in the bullish close,” Mehanti added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.61 percent or 219.64 points to close at 35,978.16 points level. KSE-30 shares index followed suit with a high of 0.64 percent or 107.12 points to end at 16,753.51 points level.

Of 370 active scrips, 206 went up, 144 retreated, and 20 remained unchanged. The ready market volumes stood at 210.573 million shares, as compared with the turnover of 265.966 million shares in the previous session.

Salman Ahmad, head of institutional sales at Aba Ali Habib, said, “The market recorded gains because of the ECC decision to increase oil margins for the marketing companies. Moreover, the MSCI review, where Pakistan’s status remained in the emerging market also helped consolidate the positions.”

Few traders sold their positions on fear of some untoward incident over the weekend, so selling surfaced before the end.

However, Salman said that market has been fundamentally strong following some adjustment, and 36,000 points was likely the key resistance level.

The index sailed comfortably above 36,000 points after almost six months. Last, it was at 36,122 points on May 3, 2019, but the market closed under the resistance level as selling trimmed gains.

The stock market during the session touched the low of 35,758 points and high of 36,048 points with trading mostly glued to trading stocks.

Samiullah Tariq, director research at Arif Habib, said wave of positivity on the economic horizon geared up the investors’ mood, especially the increase in foreign exchange reserves, continuous stability in domestic currency and interest of foreign fund houses in government securities ie treasury bills.

“The stock market has been up since last seven sessions, and increased by almost 2,200 points, sending positive signals for the market men and financial institutions,” he said.

Faisal Shaji, strategist at Standard Capital, said an extended run came when the KSE-100 tested the 36,000 level where people also booked healthy gains. Emerging political situation swayed investor sentiments.

Also investors expect some monetary easing which would be the single most important trigger, he added.

The highest gainers were Bata Pakistan, up Rs82.31 close at Rs1,728.69/share, and Service Industries Limited, up Rs43.28 to finish at Rs908.96/share.

Companies that booked highest losses were Phillip Morris Pakistan, down Rs121.83 to close at Rs2,329.17/share, and Colgate Palmolive, down Rs99.40 to close at Rs1,888.60/share.

WorldCall Telecom recorded the highest volumes with a turnover of 21.461 billion shares. The scrip lost Re0.01 to end at Re1.69/share.

The lowest volumes were witnessed in Fauji Cement, recording a turnover of 4.800 million shares, whereas the scrip lost Re0.43 to end at Rs15.27/share.