Daily Times

Stocks advanced on Wednesday amid roll over week which has induced exorbitant volumes at the index coupled with heavy buying spree by mutual funds and foreign investors. The kse-100 index leveled up by 569.77 points by the session’s closing to clock at 40,862.59 market level.

The market sentiments were continued to be buoyed by favorable financial results of the companies as increasing volumes and fresh interest has placed the index onto a recovery mode from the beginning of this week following a week of bearish trend on the index which was coupled with depleting volumes.

The investor sentiments were strong throughout the session on series of economic and financial news- robust earning session. The market momentum was led by Exploration & Production stocks primarily, as investors resorted to buying on strength. The interest in the sector was witnessed after Pakistan Oilfields Limited unveiled its financial performance for the year ended June 30th, 2020 as per which company posted net profits after tax at Rs 14.56 billion compared to Rs 13.28 billion last year, showing an increase of 9.6% YoY. Alongside financial results, the company also announced a final cash dividend of Rs 30 per share for the year i.e. around 300%. This was in addition to the interim dividends already paid at Rs 20 per share i.e. 200%.

Moreover, the rally was witnessed across the sectors following the economic data released by State Bank of Pakistan which revealed that country’s current account swung into a surplus in July 2020, recorded at $424 million, after posting a deficit of $100 million in June 2020. Country’s central bank said this was the fourth monthly surplus since last October. The banking sector was primarily the best performing sector on the day following the expectation of high Consumer Price Index, scheduled to be announced next week coupled with monetary policy decision in September.

The benchmark KSE-100 remained in the positive territory throughout the session with Kse-100 index touching its intra high at 40,894.53 points after gaining 601.71 points. The index recorded a volume of 273 million shares increasing by a fraction from the previous session, however the overall market volumes decreased from 535.07 million shares in the previous session to approximately 508 million shares.

The volume chart was led by Pakistan Refinery Limited followed by Hascol Petroleum Limited and Kot Addu Power Company Limited. The scrips exchanged 48.99 million shares, 36.1 million shares and 18.55 million shares respectively.

Sectors which lifted the index included Commercial Banks with 205 points, Oil & Gas Exploration Companies with 86 points, Fertilizer with 55 points, Textile Composite with 46 points and Power Generation & Distribution with 38 points. Among the scrips, most points added the index was by Habib Bank Limited which contributed 124 points followed by Muslim Commercial Bank with 61 points, United Bank Limited with 48 points, Pakistan Oilfields Limited with 41 points and ENGRO with 37 points.

Sectors which weighed down the index were Tobacco with 6 points, Food & Personal Care Products with 5 points, Transport with 2 points, Refinery with 1 points and Textile Spinning with 1 points. Among the scrips, most points taken off the index were by Bank Al Falah Limited which stripped the index of 35 points followed by NESTLE with 11 points, Allied Bank Limited with 8 points, Philip Morris (Pakistan) Limited with 6 points and Pakistan Services Limited with 5 points.

Global markets: Global stocks traded mixed on Wednesday ahead of U.S Federal Reserve’s annual symposium on monetary policy, which was to be held in a virtual format this year. Wall Street will look for clues on further stimulus and where the economy is headed out of the event. Investors will be looking specifically for Fed Chairman Jerome Powell’s comments on inflation and its impact on the dollar.

Moreover investors also cheered the resumption of high level trade talks between U.S and China. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin had a call with Chinese Vice Premier Liu He to “discuss implementation of the historic Phase One Agreement between the United States and China,” according to a statement released by the Office of the U.S. Trade Representative. Moreover, In a statement, the Office of the U.S. Trade Representative said that both sides made progress and were “committed to taking the steps necessary” to ensure the success of the phase one trade deal.

In Asia, stocks dragged down major indexes after shares in mainland China led losses among Asia in a mixed trading day regionally. The losses in the stocks led Chinese benchmark index Shanghai composite to shed 1.3% to close at about 3,329.74 while Hong Kong’s Hang Seng index remained flat. In Japan, the Nikkei 225 closed around the flat while South Korea’s Kospi index also stayed flat but slightly rose 0.11% to close at 2,369.32.

European stocks posted some earlier gains as investors tracked U.S.-China trade talks and the latest moves in global markets. The pan-European Stoxx 600 index provisionally closed higher by 0.8%, reversing earlier losses, with almost all sectors and major bourses in positive territory. Among the region’s major indexes, Germany’s DAX led the gains to close 0.98% higher, while CAC-40 in France also edged higher by 0.80%. UK’s FTSE-100 also followed the trend and rose 0.14% by the session’s closing.

In U.S, Wall Street witnessed a bullish trend with S&P 500 and Nasdaq Composite jumping to fresh r highs on Wednesday, building on their rallies off the March lows, as tech shares led the way higher. The strong rally was led by HP Enterprise, homebuilder Toll Brothers and retailer Urban Outfitters which jumped following their better-than-expected earnings. Moreover Shares of Facebook, Amazon, Netflix, Microsoft and Apple also edged higher.