Market watch: Stocks bounce back into green zone

Benchmark index increases 417.76 points to close at 39,714.46

KARACHI: After a new bout of heavy selling on Monday, stocks snapped a three-day losing streak and bounced back into the green zone on Tuesday on the back of improved investor sentiment in global markets.

The recovery in global markets came as investors welcomed the news of fewer fresh cases of coronavirus in China. World stocks touched record highs after China's top medical adviser said the coronavirus epidemic may plateau in the next few weeks, hinting that the world's second-largest economy could soon be back on the growth path.

The benchmark KSE-100 index opened on a positive note, with market participants welcoming the prime minister's Rs15-billion relief package to tackle inflation.

However, trading remained subdued throughout the day. Later, the index dived back into the red zone as rumours about the resignation of Federal Board of Revenue (FBR) chairman started doing the rounds.

Fortunately, FBR Chairman Shabbar Zaidi put the reports to rest, which prompted a flurry of buying activity and pushed the index up by nearly 700 points.

At close, the benchmark KSE-100 index recorded an increase of 417.76 points, or 1.06%, to settle at 39,714.46.

JS Global analyst Danish Ladhani said equities closed on a positive note with the benchmark KSE-100 index gaining 418 points. "The market remained lacklustre as value buying was witnessed ahead of the results season," he said.

Hubco (+4.3%), Lucky Cement (+2.4%), Oil and Gas Development Company (+1.5%), PSO (+3.3%), Pakistan Oilfields (+2.4%) and Engro (+0.8%) cumulatively contributed 217 points to positive close of the index.

Traded value stood very low at $39 million, down 9% and volumes came in at 161 million shares, down 11%.

"However, we expect the market to trade sideways in the short term on the back of uncertainty on the political front, ongoing IMF review and FATF review session this month," Ladhani added.

Aba Ali Habib, in its report, stated that the index found its support and resistance at 39,084.86 points and 39,985.96 points respectively.

"Sector-wise, the heavyweight cement sector pushed the index into the green zone. Among cement-sector stocks, Lucky closed with a gain of Rs18.54, followed by Cherat Cement, DG Khan Cement and Maple Leaf Cement, which went up Rs1.68, Rs2.35 and Rs1.28 respectively."

Oil and gas marketing companies also remained in the limelight throughout the trading session, which helped the index remain in the safe zone. PSO and Hascol ended the day higher by Rs8.18 and Rs1.29 respectively.

Overall, trading volumes decreased to 161.5 million shares compared with Monday's tally of 180.8 million. The value of shares traded during the day was Rs6.04 billion.

Shares of 342 companies were traded. At the end of the day, 220 stocks closed higher, 109 declined and 13 remained unchanged.

Hascol Petroleum was the volume leader with 12.9 million shares, gaining Rs1.02 to close at Rs22.65. It was followed by Unity Foods with 12.6 million shares, gaining Rs0.45 to close at Rs12.21 and TRG Pakistan with 11.4 million shares, gaining Rs0.67 to close at Rs24.29.

Foreign institutional investors were net sellers of Rs256.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.