Market watch: Four-day losing streak comes to an end

Benchmark index edges up 38.76 points to settle at 39,672.89

KARACHI: After falling for the past four consecutive sessions, the losing streak finally came to an end at the stock market as Wednesday saw the index make a slight recovery.

The KSE-100 Index depicted a volatile ride and dropped to an intra-day low of 39,462.71 points. This seemed to be the resistance level for the market because from that point the index began to move upwards, indicating investor interest in buying stocks at attractive valuations.

At close, the benchmark KSE 100-share Index registered an increase of 38.76 points or 0.10% to settle at 39,672.89.

According to Elixir Securities, Pakistan equities closed little changed with the KSE-100 Index trading in a range of 300 points.

"Turnover, on the other hand, showed a noticeable improvement evident from the $56 million value on the KSE-100 Index, up 30% compared to Tuesday," Elixir said.

Activity, however, was limited to select index names which included Engro Corp (+4.2%), Engro Fertilizers (-0.01%), Habib Bank (-0.8%) and Fauji Cement (-0.8%) that generated most of the volumes.

Interestingly, Hub Power (-1.6%) and Kot Addu Power (-1.5%) fell despite positive news that their furnace oil-based plants were coming back on line, but both recorded a good exchange of hands.



Pakistan State Oil (+0.8%), which would also benefit from the said development, closed positive.

"We see a volatile market on Thursday mainly guided by flows where activity in index names is expected to pick up near the day's end due to the MSCI and month-end institutional rebalancing," the report added.

JS Global analyst Danish Ladhani said the KSE-100 Index blew hot and cold, hitting an intra-day high of +126 points against an intra-day low of -171 points to close at 39,673.

Major laggards were heavyweight Millat Tractors (-0.73%), Mari Petroleum (-0.33%), Pakistan Oilfields (-1.15%) and Thal Limited (-1.33%), which contributed -24 points.

Among exploration and production companies, Pakistan Oilfields (-1.15%) and Pakistan Petroleum (-0.11%) remained negative as crude oil prices fell in the international market on uncertainty over OPEC output cut deal and rise in US inventories.

A rally was witnessed in the refinery and oil marketing company sector on the back of news that Prime Minister Shahid Khaqan Abbasi had decided to run power plants on locally produced furnace oil, providing some respite from the recent plunge in prices. Pakistan State Oil (+0.83%), National Refinery (+0.76%) and Shell Pakistan (+0.29%) closed positive.

Apart from this, sentiments in the banking sector were bearish where heavyweights United Bank (-1.62%), MCB Bank (-0.85%) and Habib Bank (-0.8%) stood in the red.



"Moving forward, pressure is expected to persist as the MSCI rebalancing takes place on Thursday. Accumulation of stocks for long-term investment is highly recommended at this level while short-term positions shall be reduced on strength," Ladhani said.

Overall, trading volumes rose slightly to 114.9 million shares compared with Tuesday's tally of 113 million.

Shares of 346 companies were traded. At the end of the day, 185 stocks closed higher, 141 declined while 20 remained unchanged. The value of shares traded during the day was Rs6.6 billion.

TRG Pakistan was the volume leader with 17.1 million shares, gaining Rs1.69 to close at Rs37.81. It was followed by K-Electric with 11 million shares, gaining Rs0.16 to close at Rs6.29 and Azgard Nine with 10.1 million shares, gaining Rs0.77 to close at Rs15.69.

Foreign institutional investors were net sellers of Rs1.32 billion during the trading session, according to data compiled by the National Clearing Company of Pakistan.