The Karachi Stock Exchange (KSE) during the preceding week made new records and index closed at peak level with volume crossing one billion mark following active support in banking, cement, fuel, gas and fertiliser groups.
During the last week, the KSE-100 Index gained 211 points (3.9 percent) to end up at a level of 5582.
This is yet another record closing for the Index, and this record closing was achieved with a record trading volume of 1.12 billion shares on the last day of the week (April 16).
During the week, the badla market also set records in terms of badla volume and badla investment. The badla rate also jumped towards the higher side, and remained well above the low levels. The market punters are now accustomed to high badla rates since last few months.
The index closed at 5,589.24 as opposed to 5,443.83 last week on expectations of strong quarterly results and news that the US would provide Pakistan with the technical and fundamental assistance in exploiting investment opportunities helped kick the week off on a positive note.
Although Tuesday witnessed some profit taking, gains on Wednesday on the back of positive news relating to the cement sector and the generation of higher than expected revenue from GSM license fees more than made up for the loss.
The index crossed the psychological barrier of 5500 on Thursday and settled well above it after Friday's session.
Gains on the last day of the week resulted primarily from positive sentiments generated in the cement sector in response to a statement made by President Musharraf regarding the local housing sector.
The new week will witness the reporting of first quarter of CY04 results by a number of important companies. With the start of the reporting season, news from the corporate sector is likely to be a dominant factor driving the market once again in the coming week.
Given that the market is generally expecting good performance from most of the companies, these results could help in further stretching the ongoing rally.
The Pakistan Telecom Authority has auctioned two new GSM licenses on April 14. Against general expectations of about $300 million, the regulator raised $582 million from two new players, Telenor and Space Telecom.
Technically, the market has touched overbought zone ensuing from the continued buying at every level. It seems that investors have overlooked the Relative Sensitive Index (RSI) level where any negative news might erode the overall sentiments.
The SI has touched 85 level, which indicate certain erosion in the share values. The market to come under pressure if it fails to sustain 5600 level, an analyst said.
Research analyst, Atiq Ahmed, from Capital One Equities said that during last week, PTCL has gained 2.95 or 7 percent to close at 44.75 on Friday while volumes have considerably improved since April 1, 2004.
We expect that PTCL would penetrate its key resistance level of 45.00 this week. A convincing upward push through this level can lead the stock towards 47.00 level.
In case of negative sentiments, if the stock moves towards the support level of 43.35, this can push down the stock towards its major support level at 42.85.
Hubco has been showing its strength during the last three trading sessions and gained 1.05 to close at 38.15 on Friday.
The stock has more potential to go to 38.65. This upward push through this level can lead the stock towards 40.00.
On the downward side, the immediate support level is 37.75, which can push Hubco towards 37.10. Furthermore, if Hubco does not sustain 37.10 then the stock can sink towards 36.75.
After a long time, PSO has shown an aggressive activity in the stock market. The stock gained 4.75 to close at 286 on Friday.
The stock is still in its consolidation phase between 273.00-293.90 since December 2, 2003. If PSO successfully penetrates its 293.50 level then the stock can overrun the next resistance level of 300.00 in the forthcoming week.
During the last two days, PSO's volumes have indicated a positive sign. While if the stock slides and does not hold the 284.00 levels, it can reel down the stock towards its important support level of 281.25.