Market watch: Index fails to stay over 43,000, ends almost flat

Benchmark index loses 6.55 points to finish at 42,743.65

KARACHI: Despite heavy foreign buying, the stock market remained under pressure with the KSE-100 Index ending almost flat on the opening day of the week.

A brief positive open, which saw the index surge beyond 43,000 on the back of interest in fertiliser scrips, was followed by profit-taking. The index recovered, but still closed little changed from the previous day's close.

At close, the benchmark KSE 100-share Index recorded a fall of 6.55 points or 0.02% to stand at 42,743.65.

According to Elixir Securities, Pakistan equities closed little changed in volatile trading and after wiping all intra-day gains on profit-taking.

"Market opened higher with fertilisers leading the surge as investors tracked global urea prices that posted biggest weekly gain in almost four years," stated the report. "Fauji Fertilizers (FFC PA +5%) was the biggest beneficiary, as it has unused exports quota compared to Engro Fertilizers (EFERT PA +3.9%), and contributed most to gains and churned highest volumes since the day of Pakistan's entry in MSCI EM Index."



The wider market built on fertilisers' lead with notable index names trading in green and pushing KSE-100 Index to test 43,000. Market then witnessed profit-taking, which completely wiped all morning gains with National Bank (NBP PA -5%) hitting lower price limit and denting benchmark Index the most after Supreme Court dismissed bank's appeal against Lahore High Court's decision in Pension Liability case.

"[We] see consolidation and rangebound trading in near-term with domestic political noise and ongoing holy month of Muharram keeping most investors on the sidelines; The index may hover in a range of 500 points with support and resistance defined around 43,000 and 42,000 levels respectively," the report added.

JS Global anlalyst Maaz Mulla said the index observed a lacklustre session, making an intraday high of +337 and intraday low of -122 points, ending nearly at previous day's close at 42,744 level.

Market volumes also remained low as total volume for the All-Share index touched 126mn shares, 4.4% down from the last trading day.

NML (-0.99%) from the textile sector announced its FY17 result, where the company posted consolidated EPS of Rs17.55 and also announced final cash dividend of Rs5/share.

ASL (+0.63%) from the steel sector also announced its FY17 result where the company posted an EPS of Rs1.31. NBP (-5%) from the banking sector closed at its lower circuit on Supreme Court's decision to dismiss appeal filed by NBP, maintaining judgment of the Lahore High Court to release pensionary benefits to the bank's pensioners.



On the other hand, a rally was witnessed in the fertiliser sector where EFERT (+3.90%), FFC (+4.97%) and FFBL (+2.66%) closed in the green zone as international urea prices jumped by 9%, touching USD 275/ton.

"Moving forward, we expect volatility to continue unless any clarity emerges over the ongoing political scenario. We recommend investors to remain cautious and sell on strength," Mulla remarked.

Overall, trading volumes fell to 126 million shares compared with Friday tally of 132 million.

Shares of 382 companies were traded. At the end of the day, 138 stocks closed higher, 223 declined while 21 remained unchanged. The value of shares traded during the day was Rs6.9 billion.

Aisha Steel Mill was the volume leader with 7.8 million shares, gaining Rs0.12 to close at Rs19.29. It was followed by K-Electric Limited with 7.3 million shares, gaining Rs0.04 to close at Rs6.31 and Fauji Fertilizer XD with 6.4 million shares, gaining Rs3.90 to close at Rs82.40.

Foreign institutional investors were net buyers of Rs491 million during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.