Taking its inspiration from Friday’s strong close and in line with our view this morning, the 100 Index extended gains amid heightened volatility to close up +286.49pts (+0.76%) at 38,212.28. Market participation was mixed (vol: +0% and val: +7%) likely due to central banks decision to keep Policy Rate at 13.25% (in line with market consensus) mostly due to their own unchanged outlook on inflation. Roll-over week for the Futures contract started today and may have contributed towards overall volatility as dearth of market moving triggers is expected to keep overall enthusiasm in check. Media reports of a huge discovery of shale hydrocarbons were denied by OGDC through a notice at the exchange (in line with our concerns). Major contribution to upside came from LUCK (+4.13%), MCB (+2.16%), HBL (+1.19%), UBL (+1.17%), FFC (+1.13%), PIBTL (+5.96%), TRG (+4.28%), NBP (+4.28%), POL (+0.88%) and DGKC (+2.70%).

Market participation for the 100 Index clocked in at 167.02mn shares from 166.29mn shares in the previous session (+0.44% on d/d basis). Major contribution to total market volume came from PAEL (+4.85%), UNITY (+9.02%) and TRG (+4.28%) churning 52.71mn shares out of the All Share volume of 241.54mn shares. Daily traded value for the 100 Index clocked in at USD 46.88mn from USD 43.82mn in the previous session (+6.99% on d/d basis); LUCK (USD 4.40mn), DGKC (USD 3.74mn) and OGDC (USD 3.53mn) were among top contributors from traded value perspective. The KSE100 is 8.51% below its 52-week high from Feb 6, 2019 and 33.3% above its intraday low from August 19th, 2019.

Technically speaking, the 100 Index extended gains from Friday after finding support at the rising wedge last week. Due to the current overbought situation, we expect the 100 Index to stall at around 39k (multiyear trendline resistance to come in play) and reverse its direction. Major support is at 36,625 (20EMA). (Courtesy: Intermarket Securities Limited.)