Despite selling pressure at the weekend, the market scored a century during last week as nearly all the pivotal touched their all-time high level belonging to textile, banking and cement sectors. Bulls continue their upward drive on last week with the net gain of 100 points in a week to close above 6300 level at 6318.90.
Mansoor Sadiq, technical analyst at Rafi Securities, said technically, the index is maintaining upward drive with major support level of 6215, adding there is a chance that the index may show some resistance at 6400 level, if it crosses and maintains this level next target will be 6600.
Last week, the lead by the banking and textile sectors, as both sectors still showing potential to maintain their upward trend, he said, adding National Bank, Bank of Punjab, and Faysal Bank closed at its new high levels at 90.45, 69.75 and 45.00 respectively.
Mansoor said: "It is better to book profit in NBP and Faysal Bank with the respective index resistance level of 6400, and stay positive in Bank of Punjab with support level of 68.00 target price will be 74.00, while PTC and Hubco also looks good, PTC crossed its high level of 45.60 from 1994, and closed at its new high level at 46.15, if this maintains with the support level of 45.60 next target price will be 51.00. Technically, Hubco at its lower side, buy with the support level of 30.50 with target price of 35.00."
Traders expect the market to remain volatile. Further profit-taking can be expected from current levels. A cautious stance is recommended with major index support anticipated around the 6150 levels.
The banking scrips most of the week remained in the buying column following the statement of Prime Minister Shaukat Aziz, asking banks to mobilise funds from the international market by floating bonds to finance long-term projects, and has predicted a robust performance by Pakistan's economy during FY05 should bode well for the banking sector scrips in particular and the economy in general.
In addition, the statement by the prime minister in which he once again reiterated the resolve of his government to continue with the aggressive privatisation agenda of state-owned entities like PTCL, PSO and PSM should augur well for privatisation-related scrips.
Further, figures released by the Pakistan Cotton Ginners Association (PCGA) showing that the cotton production has gone to an all-time high with the crop arrivals standing at 13.102 million bales on January 1, 2005 - more than the full year's target - bode well for the textile sector at present.
Following a 9.26 percent increase in CPI for the month of November, coupled with two consecutive fortnightly increases in petroleum product prices, the SBP cap interest rates and a modest increase was witnessed in the interest rates in order to control the existing and expected rising inflation.
The rising trend on the short-term interest rates would continue. In this regard, the prime minister's comments on single digit interest rates and SBP's policy to increase the interest rates in a measured fashion to control inflation also support a moderate increase in the cut-off yield on six-month T-bills.
On Wednesday, the market started the day on a high note opening 40 odd points up, but got wobbly at the day end as selling pressure eroded intra-day gains.
The oil stocks under the lead of PSO stirred things up early in the day, but OGDC and POL failed to sustain the momentum and slid downward taking the index with them.
Positive news on the economy front where the federal cabinet has noted that this year, the country would exceed its cotton production target by three million bales and hence would comfortably achieve a GDP growth target of 7 percent is encouraging. The development added fuel to fire and bulls stampede witnessed in the textile group. It would also have a positive impact on the entire economy specifically the textile sector scrips.
In addition, the news that Pakistan and Iran have agreed on a time-frame for the Inter-State Gas Pipeline Project (ISGPL) and rising off-take figures reported by the APCMA served as a catalyst for the rally in the twin Suis and the cement sector.
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