Lahore - The overall sentiments remained positive at the bourse during the outgoing week; however the benchmark KSE-100 Index failed to close above the psychological mark of 40k.

The Index did manage to cross the barrier a few times during the last trading session, but closed at 39,907 (+1.3 percent WoW).

Overall market activity remained healthy with major interest seen in sectors like leisure goods (+5 percent WoW), pharmaceuticals (+2.2 percent WoW), autos (+2.3 percent WoW) and gas water and utilities (+0.5 percent WoW).

Out of the Index heavyweights, cements (+2.3 percent WoW on strong cement numbers recorded during July-16), banks (+2.5 percent with value buyers jumping back in) and Oil & Gas (+3.1 percent WoW on rebounding global crude prices) remained in the limelight.

Overall participation also recorded improvement with average volume and value trade increasing by 18 percent WoW and 5 percent WoW, respectively.

Faizan Ahmed from JS research said that sharp increase in volumes traded could partly be attributed to the rumours circulating in the market regarding acquisition of K-Electric  by Shanghai Electric and Engro Corporation (ENGRO).

FXTM research analyst Lukman Otunuga commented that the shockwaves caused by Brexit had heavily punished the Eurozone, with current outlooks looking tepid as uncertainty weighed on sentiment.

“Amid the fears of the European economy eroding, expectations have risen over the European Central Bank implementing further stimulating measures to jumpstart growth,” he added.

Otunuga stated that sentiment was bearish towards Euro with investors potentially exploiting the divergence between monetary policies of the ECB and the Fed to send the EURUSD lower. The EURUSD bulls have struggled to break above 1.1200 regions, and if this resistance persists then bears could pounce, sending prices tumbling to 1.1000.

He said that the fluctuating expectations over the Federal Reserve raising US interest rates in 2016 had left the dollar in a sensitive state with prices violently oscillating between losses and gains.

“Conflicting data this month such as the firm NFP and soft labour productivity have trapped dollar in a fierce tug of war with anxiety mounting ahead of Friday’s retail sales,” he said, adding, “Retail sales can offer investors a rough idea about consumption and GDP in the US economy with a positive figure potentially dispelling this period of dollar sensitivity.”

Overall the sentiment towards the US economy is turning bullish and markets have already priced a 50 percent chance that the Fed could raise US rates in December.

From a technical standpoint, the Dollar Index is trapped under the stubborn 96.00 resistance, but a breakout above this level could open a path towards 98.00.

According to experts, activity at Pakistan bourse centered around index heavyweight sectors namely Banking, Cement and Oil Exploration.

Such interest led the index crossing the 40,000 level for the first time ever today, but correction was witnessed towards the close of trading, which resulted in the benchmark index to close at 39,907 level. The index rose 1.3 percent during the week.

Average daily volumes witnessed 18 percent increase, with volumes clocking in at 265.1 million shares. On the other hand, average daily values climbed 5 percent to Rs11.4 billion/ $109.3 million

Amongst the major sectors, Oil & Gas Exploration, Commercial Banks and Pharmaceuticals were up 3.7 percent, 2.6 percent and 2.2 percent, respectively.

Contrarily, Tobacco and Power Generation & Distribution were down, 5.5 percent, and 0.4 percent, respectively.

Foreigners were net sellers of $1.0 million worth of shares during the week. Oil & Gas sector, on the other hand, witnessed net buying of $2.1 million while the cement sector witnessed net outflow of $1.8 million.

During the week, Cherat Packaging (CPPL), in a PSX notice, announced that the company had successfully installed and commissioned the third line of Polypropylene at their plant meant for producing cement bags, and that another 50 million bag capacity will be added in 2017.

International Steels (ISL) announced its FY16 financial results today, reporting earnings of Rs1.2 billion (EPS Rs2.7), as compared to Rs202 million (EPS Rs0.5) in the same period last year.

The company’s revenues climbed 14 percent YoY to Rs20.5 billion, and gross margins were up 6 points YoY to 14 percent. In addition, financial charges also witnessed a steep decline of 28 percent YoY, clocking in at Rs731 million.

Highnoon Laboratories (HINOON) announced its 2Q2016 financial results today, reporting earnings of Rs124 million (EPS Rs5.4), as compared to Rs105 million (EPS Rs4.6) in the same period last year. The company’s revenues climbed 14 percent YoY to Rs1.3 billion, and gross margins were up 1 points YoY to 48 percent.In addition, financial charges also witnessed a decline of 43 percent YoY clocking in at Rs1.7 million.