KARACHI: The stock market took the Budget 2019-20, released a day earlier, in stride as the KSE-100 index closed with a gain of 278.08 points (0.80 per cent) at 34,937.93.

After an initial hesitation that saw the 100 index start off in the red and making intra-day low of 52 points, investors mustered courage as realisation dawned that the worst fears of all-round harsh measures had not materialised and whatever was revealed in the budget was already in the news and priced in. Investors, therefore, were not quite noisy over the corporate tax rate which was supposed to have been reduced by 1pc each year, but was frozen at 29pc for the next two years.

In the lead of institutions, cherry-picking took the index to intraday high by 478 points, before the market succumbed to selling pressure. For most part of the latter session, trading remained volatile with the index moving in a narrow range. The last half hour saw the bulls make an entry and build fresh positions mainly in the fertiliser, exploration and production and the cement sectors.

Traded volume increased by 29pc over the previous session to 151 million shares while the traded value was up 15pc to $34m. Bank of Punjab, Maple Leaf Cement Factory (MLCF) and K-Electric, Engro Polymer Chemical Ltd and TRG Pakistan stood out as the volume leaders.

Fertiliser stood out as the best performing sector by adding 82 points to the index while exploration and production and cement companies together added 108 points to the index.

For the banking sector, the budget proved to be neutral to negative.

HBL, United Bank Ltd and MCB Bank Ltd closed in the green zone. Activity was seen in the cement sector despite increase in Federal Excise Duty.

D. G. Khan Cement (DGKC), Fauji Cement Company Ltd and MLCF were major gainers

Scrip-wise, major contribution to the index upside came from Kot Addu Power Company, which was up 4.84pc, Searle Pakistan 5pc, Engro Corporation 1.87pc, Fauji Fertiliser Company 2.33pc, Engro Fertiliser 1.93pc, Lucky Cement 1.12pc, DGKC 4.17pc, FCCL 4.25pc, Pakistan Petroleum Ltd 2.26pc, Oil and Gas Development Company 1.12pc, Habib Bank Ltd 1.98pc and National Bank of Pakistan 3.12pc.

Published in Dawn, June 13th, 2019