KARACHI: The Karachi Stock Exchange (KSE) shed the gloom of the previous week as its 100-share index closed with a gain of 101.60 points (0.31 per cent) to 32,707.22 on Monday.

The index started out on a positive note and soon stormed to intra-day gains of 268 points, but it receded after a short time and traded range-bound for most of the day.

The investors’ interest was triggered mainly in the leveraged stocks following the SBP’s higher-than-expected cut in discount rate by 100 basis points to 42-year low at 7pc.

Traded volumes stood at 179 million shares of Rs10.6 billion value, up from minuscule volume of 75m shares last Friday of Rs3.6bn value. The volume on Monday also remained better than the month-to-date average volumes of 164m shares of Rs8.7bn.

According to dealers at Topline Securities, banking sector fell by 3pc as monetary policy decision was likely to squeeze sector margins. Leverage companies rallied, like PAEL up by 5pc, MLCF 4.9pc and FCCL 3.3pc, as their borrowing costs would decline.

Analyst Umair Hasan at JS Global said that the market opened with strong bullish momentum but soon corrected itself as investors turned cautious ahead of the budget.

Strong investor interest in highly leveraged cement scrips such as, CHCC, DGKC, KOHC all hovered either at or near their ‘upper circuit’ to end, 4.7pc, 3.1pc and 3.5pc higher.

However, banking heavyweights BAHL and MCB hit their ‘lower-lock’ while ABL, BAFL, NBP, and UBL were down by 3.8pc, 3.9pc, 4.2pc and 4.7pc.

Analyst Ahsan Mehanti at Arif Habib Corp stated that the discount rate cut sparked activity in the leveraged stocks in cement, auto, fertilisers and textile sectors. Higher global crude prices supported oil stocks.

Published in Dawn, May 26th, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play