Market watch: Despite a smart recovery, KSE-100 ends slightly in the red

Benchmark index falls 57.68 points to close at 43,078.38

KARACHI: The Pakistan Stock Exchange witnessed another volatile session on Friday as the index traded in a range of over 700 points and oscillated between the red and green zones.

In line with the previous session, the KSE-100 index continued its downward trajectory and plunged over 789 points in the first two hours of trading. An uncertain political climate and not-so-encouraging financial results dented investor interest in the market.

However, just before midday break, the direction changed as investors took advantage of the attractive valuations to cherry-pick stocks, sending the index upwards.

Though the index continued to recover and even managed to enter the green zone, it failed to sustain the momentum and slipped in the negative territory with a small decline.

At close, the benchmark KSE 100-share Index recorded a decrease of 57.68 points or 0.13% at 43,078.38.



According to Elixir Securities, Pakistan equities closed last day of the week slightly lower after paring morning losses that pulled the benchmark index towards 42,300.

"The market started on a weak note as sentiments remained subdued amid prevailing noise on the political front," stated Elixir.

Stocks carried the bearish momentum and skidded lower while activity in the wider market was also restricted, especially in the morning session.

The index, however, recovered in the afternoon session as gains in oil and select index names on reported local institutional buying helped wiped off the decline.

Pakistan Petroleum (+5%) and Oil and Gas Development Company (+2.8%) were among top gainers. Among the major losers were Engro Corp (-2.3%) and its holding company Dawood Hercules (-3.9%), which plunged after Engro announced sub-par quarterly results.



"(We) are seeing volatility to persist next week with flows and domestic politics mainly guiding market direction. Chartists expect strong support near current levels and expect a bounce back given oversold market conditions," the report added.

JS Global analyst Maaz Mulla said the market remained negative during first half of the day, hitting an intra-day low of -789 points. However, recovery was seen during the second half as the index touched an intra-day high of +51 points, to eventually close 58 points down.

Poor investor sentiments in the banking sector weighed down the index by 29 points as MCB Bank (-0.16%), Habib Bank (-0.81%) and United Bank (-0.28%) closed lower. Engro Corp (-1.62%) announced its 1H2017 results, where the company posted earnings per share (EPS) of Rs7.21 (down 32% YoY) along with dividend per share of Rs7.

Habib Metropolitan Bank (-0.18%) also posted its 1H2017 results, announcing EPS of Rs2.14 (down 6% YoY) in line with expectations.

The exploration and production sector recovered the most as all stocks closed in the green zone and contributed 165 points to the KSE-100 index. Pakistan Petroleum (+5%) from the sector closed at its upper circuit.



"The market is expected to remain volatile due to political uncertainty, however, a temporary relief rally is expected," Mulla added.

Overall, trading volumes rose to 188 million shares compared with Thursday's tally of 167 million.

Shares of 378 companies were traded. At the end of the day, 154 stocks closed higher, 203 declined while 21 remained unchanged. The value of shares traded during the day was Rs11.2 billion.

Azgard Nine was the volume leader with 18.1 million shares, gaining Rs1 to close at Rs16.26. It was followed by Aisha Steel Mills with 14.2 million shares, losing Rs0.18 to close at Rs20.86 and TRG Pakistan with 13.1 million shares, gaining Rs1.29 to close at Rs42.88.

Foreign institutional investors were net buyers of Rs189 million during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.