Market watch: Bourse recovers from hefty loss, closes little changed

Benchmark KSE-100 index inches down 16.17 points

KARACHI: The stock market continued to decline for the fifth consecutive session on Thursday as it endured volatile movements, losing over 500 points in intra-day trading, before investors cherry-picked stocks, which helped the benchmark index recover.

At close, the Pakistan Stock Exchange’s (PSX) KSE 100-share Index recorded a slight fall of 16.17 points or 0.03% to finish at 48,289.66.

Elixir Securities, in its report, stated that Pakistan equities closed little changed after undergoing a roller coaster ride and recovering from morning declines, which had pulled the benchmark KSE-100 index down to near 47,800 points.

“The day started on a weaker note as the market failed to take cue from regional bourses that traded largely higher post-interest rate hike by the US Federal Reserve,” said analyst Ali Raza.



“The general lack of interest and dearth of serious buyers led to the plummeting of stocks and the KSE-100 index nosedived by as much as 1.2% by early afternoon,” he said.

Even index-heavy oil stocks failed to make any mark despite global crude snapping its seven-day losing streak and settling higher overnight.

“However, institutional value buying at lows in the final two hours primarily in blue chips helped the market to recover and close with trimmed losses,” the analyst said.

“[We] expect market behaviour to remain choppy in the absence of major triggers while (impending) court verdict on the Panama case and news flow about a leverage product will keep participants on the lookout.



“At this stage, we recommend cherry-picking value plays with the MSCI EM (emerging markets) names as our top picks and advise against any adventure in small-cap speculative plays,” Raza added.

JS Global analyst Arhum Ghous said another bleak session was witnessed at the bourse as the KSE-100 index traded between an intraday high of +35 points and intraday low of -531 points.

“Pakistan Oilfields (+0.70%) and Oil and Gas Development Company (+0.66%) retrieved from its preceding trend to close in the green as crude oil prices rose to extend gains from the previous session after official data showed that US stockpiles had eased from record highs,” said Ghous.

Moreover, mixed sentiments were witnessed in the cement sector where major contributors Lucky Cement (-0.19%) and Maple Leaf Cement (-0.11%) closed in the red.



“On the contrary, Attock Cement (+1.56%) closed positive on the back of news that its subsidiary in Iraq has established a letter of credit amounting to $9.75 million for a cement grinding unit in favour of Chinese supplier Hefei Cement Research and Design Institute. The project is likely to come online by March 2018,” the analyst said.

The fertiliser sector lost value to close in the red zone. Heavyweights Fauji Fertilizer Bin Qasim (-2.44%) and Fauji Fertilizer Company (-1.05%) were major losers of the sector.

“Furthermore, confidence reappeared in the banking sector where buying was witnessed in Habib Bank Limited (+0.12%) due to an attractive valuation owing to the MSCI trigger,” he said.

“We expect volatility to continue and recommend investors to stay cautious,” Ghous added.



Overall, trading volumes fell to 180 million shares compared with Wednesday’s tally of 206 million.

Shares of 384 companies were traded. At the end of the day, 148 stocks closed higher, 217 declined while 19 remained unchanged. The value of shares traded during the day was Rs10.2 billion.

K-Electric was the volume leader with 28.5 million shares, losing Rs0.07 to close at Rs9.11. It was followed by The Bank of Punjab with 16.4 million shares, gaining Rs1 to close at Rs15.71 and Sui Northern Gas Pipelines with 7.7 million shares, gaining Rs2.07 to close at Rs134.24.

Foreign institutional investors were net buyers of Rs492 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.