Market watch: Index loses all morning gains, closes near 36,000

Benchmark KSE-100 index decreases 173.13 points

The index saw a see-saw ride on Tuesday, losing all of its morning gains to end negative as institutional selling and pre-budget uncertainty taking over whatever positive sentiment prevailed during the opening few hours.

At close on Tuesday, the Pakistan Stock Exchange’s benchmark KSE 100-share Index recorded a fall of 0.48% or 173.13 points to end at 36,061.56.



Elixir Securities, in its report, said after Monday’s sharp correction, stocks inched upwards as value hunters cherry-picked cements, oils and fertilisers; pushing benchmark KSE-100 index over 36,400 intra-day.

“However, large off market crosses during the day shattered confidence and KSE-100 index erased all gains to test its key support levels of 36k.

“Fauji Cement (FCCL PA -5%) closed another session at lower price limit while over 11 million shares crossed off market at an average price of 13% below Monday’s close,” said the report.

Declines in the wider market were led by the Muslim Commercial Bank (MCB PA -0.9%), Pakistan Petroleum Limited (PPL PA -3.3%) and Fauji Fertilizer (PA -2.6%) on institutional selling while Engro Foods (EFOODS PA +3.8%) traded most in twelve weeks and against market direction on renewed interest of its stake-sale transaction possibly going through at a premium,” it added.

“We see support to kick in with investors cherry-picking value plays primarily MSCI Pakistan names with volumes likely led by retailer investors in small and mid-caps,” remarked Elixir Securities analyst Ali Raza.

JS Global analyst Arhum Ghous, on the other hand, said the index rallied to make an intraday high of 180 points but succumbed to selling pressure.

“Selling pressure during the late hours can be attributed to sceptical investor’s preference to remain on the sidelines before the budget announcement.”

“FCCL closed on its lower circuit for second consecutive day on the back of the news that an accident occurred at the company in which the Raw Meal Silo structure collapsed damaging its new production line. The damage could potentially hamper company’s operations for approximately six months.

“Selling pressure was seen in both the gas utilities as both Sui Northern Gas Pipelines Limited (SNGP -3.55%) and Sui Southern Gas Company Limited (SSGC -4.59%) lost value to close in the red zone.



“Moving forward we expect the market to remain under pressure before the budget announcement and recommend investors to remain cautious,” said Ghous.

Trade volumes increased to 220 million shares compared with Monday’s tally of 205 million.

Shares of 361 companies were traded. At the end of the day, 146 stocks closed higher, 192 declined while 23 remained unchanged. The value of shares traded during the day was Rs10.3 billion.

K-Electric Limited was the volume leader with 18.9 million shares, losing Rs0.05 to finish at Rs7.55. It was followed by Sui Northern Gas Pipelines with 14.9 million shares, losing Rs1.29 to finish at Rs35.07 and Pakistan International Bulk Terminal Limited with 12.5 million shares, losing Rs0.37 to close at Rs30.24.

Foreign institutional investors were net buyers of Rs103 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.

 

Published in The Express Tribune, June 1^st, 2016.

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