LAHORE: The KSE 100 index was off to a weak start perhaps amid rising uncertainty on the back of Trump induced trade tariffs on imports of steel and aluminum, a move likely to trigger retaliation from the EU and China and potentially lead to a trade war. A looming trade war is getting a sharp reaction in the foreign exchange market as well and the clear victim is the US dollar.
Resorting back to its historical disconnect with the international markets, KSE 100 index extended gains from the previous session, amid flattish participation (volume +5.65 per cent and turnover -13.22 per cent).
Thanks to another robust performance from cement companies, driven by recent price hike by cement players in the north, which looks promising amid schemes in the run-up to elections.
According to an IMS research report, it is too early to be cheering a turnaround in cement pricing discipline and the rally should be seen as an opportunity to book gains.
Major support to the KSE 100 index came from cement companies, thanks to LUCK (+2.09 per cent), FCCL (+5 per cent), MLCF (+5 per cent), DGKC (+2.39 per cent), CHCC (+4.79 per cent), PIOC (+4.99 per cent) and KOHC (+4.59 per cent) for adding 122 points to the KSE 100 index. The day ended on a positive note with the KSE 100 closing up 230.10 points (+0.53 per cent) at 43,740.49.
Materials dominated a significant chunk of market turnover for the 2nd day in a row (49.4 per cent of total turnover; down 31 per cent on day on day basis). Investor interest was also seen tilting towards industrials (18.3 per cent of total turnover; up 85.2 per cent on day on day basis) and energy (9.24 per cent of total turnover; up 11.7 per cent).
Industrials (-0.32 per cent) came under severe duress with PAEL (-3.88 per cent) leading the sleuth of market bears along with utilities (-0.14 per cent) as SNGP (-0.85 per cent), NPL (-3.25 per cent), NCPL (-2.62 per cent) and KEL (-0.78 per cent) remained under pressure.
In market related news, NEPRA has cut January power tariff by Rs3.2 per unit under fuel- cost adjustment. For the outgoing week, the KSE 100 index gained 473.29 points (+1.09 per cent) with major contribution from LUCK (+7.22 per cent), DGKC (+10.26 per cent), FFC (+4.18 per cent), MLCF (+14.35 per cent) and ENGRO (+2.69 per cent) adding 334 points while UBL (-3.83 per cent), MARI (-8.76 per cent) and PAEL (-9.85 per cent) took away 166 points.
Market participation in the KSE 100 index increased to 84.42 million shares (+5.75 per cent). A major contribution to total market volume came from DSL (-2.38 per cent), TRG (+1.66 per cent) and BYCO (-2.91 per cent) churning 47.54 million shares out of the All Share volume of 229.93 million shares. Daily traded value for the KSE 100 index declined to $57.86 million from $66.82 million in the previous session (-13.41 per cent); DGKC ($8.52 million), TRG ($5.15 million) and PAEL ($4.85 million) were among top contributors from a traded value perspective. A major contribution to the KSE 100 index upside came from LUCK (+2.09 per cent), HBL (+0.94 per cent), NESTLE (+5 per cent), OGDC (+1.06 per cent) and FCCL (+5 per cent) adding 137pts.
On the flip side, MCB (-0.70 per cent) took away 13 points. The KSE 100 index is 16 per cent above its 52-week low of 37,736.73 reached on December 12, 2017, and 18 per cent below its 52-week high of 53,127.24 touched on May 25, 2017.
Technically speaking, the KSE 100 index extended gains for the 4th consecutive session and closed shy of previous weeks high (43,945). The KSE 100 index after posting back to back losses for 4 straight weeks closed in the green on the weekly chart with a hammer. Next major resistance is estimated at 44,637 (February’s high).
