Share prices showed upward movement for the second consecutive week, receiving support from petroleum sector and banking stocks, with the index registering a net improvement of 2.63 percent on the Lahore Stock Exchange (LSE).
The market, which started improving after the introduction of Continued Finance System (CFS) that improved the liquidity position, also maintained the trend during the week ended August 02, on the back of petroleum and banks shares due to their good corporate earnings.
According to stock analysts, petroleum and banking sectors are fundamentally very strong and they have remained stable even during the crisis caused by the badla financing issue. Both the sectors are expected to show further strength in the coming sessions.
According to them, if investors trade while living in limits, both the sectors could be one of the best choices for investment. The most significant feature of the week's trading was that the LSE-25 index crossed 3,900 points' level, though at the weekend it ended below this level. Overall the LSE-25 index surged 100.09 points or 2.63 percent to finish at 3897.40 points. Volume, however, remained steady at 50.110 million as against its previous closing at 50.728 million shares.
The week under review opened with across the board surge, with petroleum and banking sectors showing outstanding performance, while the benchmark index shoot up, to finally end above 3,800 points level. The market gave an extraordinary performance throughout the session, lifting the LSE-25 index 63.35 points or 1.66 percent to 3860.66 points from 3797.31 points of the previous session. Volume was also up 10.744 million shares, closing at 61.473 million shares as against 50.728 million shares of the previous session.
The market sentiment remained bullish from open to the close, with renewed interest in oil and banking sector, particularly Pakistan Oil Fields, PPL, National Bank and MCB.
The way was clear for the market to move ahead and strengthen its position after the launch of the new Continued Finance System (CFS), but because of local bodies' elections activity remained slow.
Bullish trend prevailed on Tuesday, while equities, led by banks and petroleum shares scored fresh gains. The LSE-25 index was up by 31.64 points to 3892.30 from 3860.66 points. Volume surged to 81.387 million shares from 61.473 million shares, registering a significant improvement of 31.64 million shares.
Share prices once again traded in bullish zone on Wednesday following fresh funding, while the index crossed 3,900 level showing an improvement of 0.9 percent, amid descending transaction volume. The LSE-25 index posted a net rise of 36.14 points closing at 3,928.44 points versus 3892.30 points.
Volume retreated to 73.430 million shares from 81.387 million shares, registering a decline of 7.957 million shares. The market took a bullish start and the index moved up 50 points in early hours, following fresh funding, mainly resulting from alternate badla finance system. Oil sector showed an aggressive movement following news about increase in prices of petroleum products in the local market.
Equities, however, retreated due to profit taking on Thursday, thumping three days' consecutive winning streak, posting losses. The LSE-25 index finally closed at 3904.43 points as opposed to 3928.44, registering a fall of 24.01 points. Volume was also down by 3.051 million shares to 70.379 million shares from 73.430 million shares of the previous session. The sentiment was positive at the opening and the market continued the winning streak in early hours of trading.
However, later profit taking emerged from traders, leading the equities downward. The Lahore bourse depicted weakness on last trading of day of the week on account of profit taking. The LSE-25 index retreated to 3897.40 points from 3904.43 of Thursday, showing a fractional fall of 7.03 points. Overall turnover also declined to 50.110 million shares from 70.379 million of the previous session, registering a decline of 20.269 million shares. Activity was dull and the market remained directionless because no one was ready to take risk of fresh position on the weekend.
According to brokers the market gained 100 points during whole week, while main sector was oil and gas which improved on rumours of revision of 'capping limit' and change in commission margins of oil marketing companies.
Soaring prices of crude oil in international market and rise in POL prices in domestic market led the oil sector upward. The news regarding grant of more licences for exploration activities in the country will give boost to oil and gas sector, an analyst said.
According to the press reports, the federal government intends to offer 40 new blocks for oil and gas exploration, and to lure foreign investors in this sector the Ministry of Petroleum and Natural Resources will hold conferences in various countries. However, according to pundits, investors should trade carefully, avoiding crossing their capacity to buy.
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