KARACHI: The four-day losing streak finally came to an end on Wednesday as the KSE-100 index encountered resistance at 41,900 points and shot up to close comfortably in the positive territory.
Stocks bounced back from lows and staged a massive recovery, climbing almost 1,000 points after hitting an intra-day low at 41,927.22. Before the market’s close, the index gave up some gains, but still ended the session with a significant advance.
The rally was led by the oversold cement, automobile and oil stocks with attractive valuations.
At the end of trading, the benchmark KSE 100-share Index recorded an increase of 927.63 points or 2.21% at 42,910.79.
Elixir Securities, in its report, stated that Pakistan equities snapped a four-day losing streak and closed higher with the benchmark index settling over 42,800 points, up 2.2%.
“The market opened positive and quickly edged up in early trade as index names fetched interest from local institutions on attractive valuations and relative calm on the political front,” stated Elixir.
All major sectors including the lagging cement stocks bounced back while mid- and small-caps also closed higher, albeit on relatively less volumes on retail buying.
Habib Bank (+3.2%) led the gainers and added 99 points to the KSE-100 index while Engro Corp (+3.1%), Sui Northern Gas Pipelines (+5%), Pakistan State Oil (+3.8%) and Hub Power (+2.5%) were also among the top-five gainers.
“With the benchmark KSE-100 index finding support near 42,000, we see the market edging up further on improved volumes as smart money flows in to take advantage,” he added.
JS Global analyst Maaz Mulla said the market witnessed a recovery as value investors took the opportunity to buy stocks at attractive prices.
Volumes, however, deteriorated by 23% to 167 million shares compared to 217 million in the previous session. Cherat Cement (+2.9%) announced its results for FY17 with earnings per share of Rs11.08 and final dividend of Rs3.50 per share.
Fauji Cement (+4.9%) closed near its upper circuit on account of news regarding its production line-II that was expected to resume operations from October.
In the banking sector, Faysal Bank (-0.7%) and Bank AL Habib (+4.3%) announced their results for 1H2017. They posted earnings per share of Rs2.17 and Rs4.10 respectively.
Pakistan Oilfields (+2%) and Pakistan Petroleum (+1.6%) also recovered after recent correction in these stocks, Mulla said.
“We expect further recovery in the following sessions and recommend investors to book profits on any possible selling opportunity,” he added.
Overall, trading volumes fell to 166.7 million shares compared with Tuesday’s tally of 217 million.
Shares of 396 companies were traded. At the end of the day, 314 stocks closed higher, 71 declined while 11 remained unchanged. The value of shares traded during the day was Rs9.3 billion.
TRG Pakistan was the volume leader with 14.3 million shares, gaining Rs1.55 to close at Rs41.99. It was followed by Azgard Nine with 12.7 million shares, gaining Rs0.99 to close at Rs16.17 and Aisha Steel Mills with 8.7 million shares, gaining Rs1 to close at Rs20.35.
Foreign institutional investors were net sellers of Rs300 million during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.