Market watch: Stocks fall slightly in wake of global crude losses

Benchmark KSE 100-share Index drops 41.14 points


Our Correspondent August 22, 2016
Benchmark KSE 100-share Index drops 41.14 points

KARACHI: Pakistan equities closed on Monday little changed as late buying helped wipe off losses suffered earlier in the day.

At close, the Pakistan Stock Exchange (PSX) benchmark KSE 100-share Index ended 41.14 points, or 0.10%, lower to finish at 39,457.95 points.

Elixir Securities, in its report, said the day kicked off on a dull note with the wider market struggling to find direction, however, index-heavy oil stocks pulled the KSE-100 index into the negative zone as investors tracked fresh losses in global crude markets.

“Thereafter, financial stocks followed suit with Habib Bank (+0.7%) and United Bank (+0.2%) denting the KSE-100 index on reported foreign selling albeit with thin volumes, however, late interest led by institutional flows ensured a close in the green.”



Cement stocks traded in the red most of the day on anxiety over the outlook, however, support was found at lows as excitement over earnings overshadowed the concerns, said the report.

Engro Corp (-0.5%) recovered at close as reported foreign selling at midday was mostly picked up on hopes of a bounce back after nearly 7% losses in the last three days.

“We see earnings to keep interest alive in select names as OGDC and Hubco are due to announce full-year results,” Elixir Securities analyst Faisal Bilwani commented, adding the on-going futures rollover week would keep a check on any bounce back.

However, “we see an attempt to re-test 40,000 points before month’s end with oil stocks likely leading the pullback.”

Meanwhile, JS Global analyst Ahmed Saeed Khan said volatility prevailed on the first day of the futures rollover week as the index remained under pressure throughout the day to close at 39,458, down 41 points.



“The oil sector came under pressure as global crude prices fell after the longest run of gains in four years on news that Iraq seeks to increase exports and Nigerian militants call an end to hostilities.”

The biggest laggards of the sector were OGDC (-0.83%) and Pakistan Petroleum (-0.48%).

“Marginal positivity was witnessed in the cement sector that closed on a flattish note, where Lucky Cement (+0.33%) and Maple Leaf Cement (+1.36%) rallied on the back of news that tax exemptions will be given for the import of motorway machinery,” said Khan.

“A rally in the pharmaceutical sector was attributed to the news that Drap (Drug Regulatory Authority of Pakistan) is likely to agree to a further increase in drug prices, where Searl (+1.67%) and Glaxo (+2.42%) were the biggest index movers in the sector.”

“Going forward, we expect volatility to persist in the market and advise cautious approach in the on-going rollover week,” Khan added.

Trade volumes fell to 186 million shares compared with Friday’s tally of 218 million.

Shares of 386 companies were traded. At the end of the day, 163 stocks closed higher, 205 declined while 18 remained unchanged. The value of shares traded during the day was Rs7.1 billion.

K-Electric Limited was the volume leader with 25.6 million shares, losing Rs0.02 to finish at Rs8.70. It was followed by Amtex Limited with 24.5 million shares, gaining Rs0.65 to close at Rs2.54 and Dewan Farooque with 11.4 million shares, gaining Rs0.28 to close at Rs4.41.

Foreign institutional investors were net buyers of Rs194 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, August 23rd, 2016.

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