Market watch: KSE-100 maintains losing streak despite strong institutional buying

Index, however, recovers from over 1,000-point loss, ends marginally down

KARACHI: The stock market closed in the red for the fourth consecutive day following a volatile trading session on Tuesday.

The benchmark index lost close to 1,000 points after opening in the wake of massive selling by retail investors and touched the intra-day low at 41,062.73 points.

However, strong buying from institutional investors stemmed a free fall, providing the market an opportunity to enter the positive zone, though for a brief period. Losses in the cement sector dampened the positive sentiment later, which pulled the index down to a marginally lower close.

At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 170.22 points or 0.40% at 41,983.16.

According to Elixir Securities, Pakistan equities closed marginally negative after a nerve-testing volatile session.

“Stocks opened lower and slipped deep in the red with the benchmark KSE-100 index testing 41,000 (shedding over 1,000 points or 2.5%) due to selling, primarily by local retail investors,” it said.

However, the decline was followed by a sharp and very encouraging rebound on domestic institutional buying that helped wipe off all the day’s losses.

The wider market traded briefly in the green near the closing bell, nonetheless losses in cement stocks pulled the market to settle marginally lower at the day’s close.



“On the leader board, the most positive impact came from Engro Corp (+1.9%) while Lucky Cement (-3.4%) contributed the most negative points to the benchmark index,” Elixir said.

“DG Khan Cement (-4.8%) also continued its losing streak and traded mostly at the lower price limit, churning out the highest volumes since January this year. While the stock is down 18% so far this month, we see a bounce back in the days ahead.

“We expect the index to find a footing near current levels and see a bounce back in coming days on institutional cherry-picking,” the report added.

JS Global analyst Maaz Mulla said that the market continued its steep decline during the initial hours of today's trading session, making an intraday low of -1,091 points.

“However, hefty buying in heavyweight stocks during the latter hours resulted in major recovery in the KSE-100 index, allowing it to close at 41,983 level, down 170 points.

“Volumes improved by 42%, standing at 217 million shares for the day as compared to 153 million in the previous day. ANL (-5.4%) continued to lead the volume with 15 million shares of the textile composite stock changing hands through the day.

“Recovery came from upside in the heavy weight commercial banking scripts including HBL (+0.5%), ABL (+4.9%), UBL (+0.9%) and NBP (+0.7%). Amongst steel companies, ASTL (+3.9%), INIL (+0.1%), and ISL (+0.9%) closed in the green zone as investors picked these stocks at attractive prices.



“KAPCO (+2.5%) gained with fiscal year 2016-17 financial results announced today where the company reported an EPS of Rs10.73 and also announced a final cash dividend of Rs4.75.

“We believe negativity in the market to continue on the back of political uncertainties and poor economic indicators. Also, redemptions from mutual funds are likely to cause further selling pressure.

“Expecting such volatility we recommend investors to be cautious in trading unless economic indicators and prevailing political scenario improve,” he added.

Overall, trading volumes rose to 217 million shares compared with Monday’s tally of 153 million.

Shares of 374 companies were traded. At the end of the day, 106 stocks closed higher, 252 declined while 16 remained unchanged. The value of shares traded during the day was Rs12.1 billion.

Azgard Nine was the volume leader with 15.2 million shares, losing Rs0.86 to close at Rs15.18. It was followed by Aisha Steel Mills with 14.1 million shares, losing Rs0.47 to close at Rs19.35 and Sui Southern Gas Company with 11.4 million shares, losing Rs1.46 to close at Rs33.96.

Foreign institutional investors were net sellers of Rs716 million during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.