PSX ends one-month high; earnings spur optimism

Market continued its upward march on Monday with the benchmark index rising 227 points to close at one-month high of 32,706 points, driven by rally in banking stocks amid better earning expectations, dealer said.

"Stocks opened up in the early trade, led primarily by gains in financials (stocks) ahead of their annual results announcements," said Ali Raza at Elixir Securities in a post market comment.

Ahmed Saeed Khan at JS Global Research said star performer of the day was Pakistan Oilfields, which closed up 1.70 percent on expectations of better earning due on Wednesday."

Foreign investors, however, offloaded their some of their holding and their net sales stood at $3.31 million.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share index surged 227.24 points, or 0.70 percent, to 32,706.22 points.

Index closed in positive zone in eleven straight sessions. The cumulative gains in the eleven sessions sum at 6.35 percent, or 1,945.42 points.   Benchmark index, after testing an intra-day high of 32,850 points, shed nearly 150 points before close of the trade.

KSE 30-share index rose 111.21 points, or 0.58 percent, to close at 19,124.11 points. Volumes remained steady at 152.17 million shares. Trading value dropped eight percent to Rs8.70 billion. The market capitalisation rose Rs45 billion to Rs6.90 trillion.

Out of a total of 344 active stocks, 170 closed up, 152 down, and 22 remained unchanged.

Raza said the trio of top three index heavy banks namely, Habib Bank rose 2.12 percent, MCB Bank surged 2.38 percent and United Bank increased 1.63 percent, contributed more than half of the gains in the benchmark index.

Fertilizers stocks traded lower in the backdrop of urea pricing concerns. Engro Fertilizer marginally declined 0.1 percent but was the volume leader with 9.4 million shares traded as the company announced its year-end earnings. The company’s earnings increased 79 percent year-on-year to Rs11.1/share with a final cash dividend of Rs3/share.

"We expect benchmark to face resistance at the current levels, while better turnover on earnings related interest and institutional inflows remained a key to sustain upside," Raza said. 

 Ahmed Saeed Khan at JS Global Research said intraday drop in global crude oil prices brought some pressure on the sector. Also a drop in DAP (Diammonium Phosphate) sales in December added pressure on relevant stocks.

"Moving forward we expect the market to continue with its positivity led by the banking sector,” Khan said. “Higher than average participation from the foreign investors in banking and cement stocks is expected to act as a positive sentiment," he said.

Engro Fertilizer was volume leader with 9.43 million shares, as it closed at Rs81.11. It was followed by TRG Pakistan with 7.17 million shares and closed at Rs27.87. Pace (Pak) recorded trade in 6.90 million shares and closed at Rs6.72.