Market watch: KSE-100 endures range-bound trading on political tensions

Benchmark index increases 327.67 points to settle at 38,122.72

KARACHI: As the drama unfolded on the political front, investors at the bourse took some positive cues on Wednesday, helping the KSE-100 index rise 328 points and once again cross the 38,000-point mark.

During the day, the Supreme Court of Pakistan adjourned hearing of a petition challenging the extension in tenure of Chief of Army Staff General Qamar Javed Bajwa.

Earlier, trading began with a sharp spike but investor sentiment weakened shortly afterwards, which resulted in range-bound trading in early hours.

Mood at the bourse took a hit after midday and the KSE-100 index dipped into the negative zone in the wake of political uncertainty. As the market neared the day's close, cheap stock valuations triggered a buying spree, which helped erase the losses and led to handsome gains.

At close, the benchmark KSE 100-share Index recorded an increase of 327.67 points, or 0.87%, to settle at 38,122.72.

Arif Habib Limited, in its report, said political uncertainty had taken a centre stage in market trading since Tuesday, when the Supreme Court took notice of extension in the army chief's tenure.

"Considering this a procedural issue, which will be resolved by the government, the market took a positive view of the situation and partly recovered the losses made in Tuesday's session," it said.

The market also recorded a loss of 123 points as remarks made by the Supreme Court became public, denting investor sentiment for a while.

Buying activity was largely noted in steel and cement sectors. Steel and auto stocks hit their upper circuits.

The cement sector led the volumes with trading in 49.7 million shares, followed by the vanaspati sector (24 million) and food companies (23.5 million).

Among individual stocks, the top volume leaders were Unity Foods (24 million) and Fauji Foods (19.9 million), followed by Maple Leaf Cement (15.3 million), which hit its upper circuit, the report added.

JS Global analyst Maaz Mulla said a range-bound session was witnessed at the bourse as the KSE-100 index traded between intraday high of +327 points and intraday low of -123 points to close at 38,123.

"The range-bound session can be attributed to the army chief's extension case in the Supreme Court," he said.

Trading volumes stood at 228 million shares versus 489 million shares traded on Tuesday. Top volume leaders were Unity Foods (+0.4%), Fauji Foods (+3.5%) and Maple Leaf Cement (+5%), which cumulatively contributed 59 million shares to the total volume.

In other news, the All Parties Conference of opposition parties reiterated its demand for fresh general elections without any interference.

The banking sector moved up than its previous day's close, where MCB Bank (+3%), National Bank (+1.9%), Meezan Bank (+1.5%), HBL (+1.3%) and UBL (+1.5%) were the major movers.

A rally was witnessed in the steel sector where Ittefaq Iron Industries (+8.5%), International Steels (+4.5%), International Industries (+5%) and Amreli Steels (+1.7%) closed in the green zone.

"Moving ahead, we expect the market to remain choppy due to developments on the political front, therefore, we recommend investors to book profit on strength," the analyst added.

Overall, trading volumes decreased to 228.4 million shares compared with Tuesday's tally of 488.7 million. The value of shares traded during the day was Rs8 billion.

Shares of 366 companies were traded. At the end of the day, 231 stocks closed higher, 118 declined and 17 remained unchanged.

Unity Foods was the volume leader with 24 million shares, gaining Rs0.05 to close at Rs12.99. It was followed by Fauji Foods with 20 million shares, gaining Rs0.47 to close at Rs13.78 and Maple Leaf Cement with 15.3 million shares, gaining Re1 to close at Rs20.96.

Foreign institutional investors were net sellers of Rs47.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.