Market watch: Stocks inch up in range bound session

Benchmark index rises 54.03 points to settle at 34,803.60

KARACHI: Uncertainty prevailed at the Pakistan Stock Exchange (PSX) on Tuesday as the KSE-100 index endured a volatile session and trading remained largely range bound, which restricted the market from posting extraordinary gains.

Investor sentiment weakened following a decline in international oil prices, which fuelled a sell-off in the oil sector at the local bourse. Resultantly, index-heavy oil stocks moved down.

During the day, the international crude oil prices fell, weighed down by a stronger dollar and oversupply concerns after it was announced that a trio of Gulf producers would end voluntary output cuts.

Brent crude fell 1.1% to $40.34 per barrel while the US West Texas Intermediate (WTI) crude shed 1% to trade at $37.80 per barrel.

In addition to that, uncertainty over the upcoming budget caused volatility in the stock exchange and the index oscillated between positive and negative zones throughout the day, before ending the session with a slight increase of 54 points.

Earlier, trading kicked off on a bullish note, however, uncertainty emerged soon after due to selling pressure on exploration and production stocks, which dragged the index down. Towards midday, the market managed to erase the losses and climb upward but weak investor sentiment and a sombre mood wiped off some of the gains later. The index closed the day on an almost flat note.

At close, the benchmark KSE-100 index recorded an increase of 54.03 points, or 0.16%, to settle at 34,803.60.

Arif Habib Limited, in its report, stated that the market traded in a narrow range of -61 points and +106 points, closing the session up by 54 points.

“A decline in international crude oil prices brought down oil stocks, including Oil and Gas Development Company, Pakistan Petroleum Limited and PSO, which kept selling pressure on the index,” the report said.

Fertiliser and pharmaceutical sectors were not much different and saw profit-booking.

Lotte Chemical posted the highest volumes in recent times with trading in 36.2 million shares. Among banks, HBL notched up nominal gains but remained largely positive throughout the session due to dividend being part of the stock price.

The auto sector performed well on expectation of the offer of incentives in the upcoming budget.

The chemical sector recorded trading volumes of 47.1 million shares, followed by technology firms (22.9 million) and cement companies (21.2 million), the report said.

JS Global analyst Danish Ladhani said the benchmark KSE-100 index closed on a flat note, just gaining 54 points, or 0.2%, to close at 34,803. “The market traded sideways after a brief pre-budget rally, which was also witnessed on Monday,” he said.

Oil and Gas Development Company in the exploration and production sector, HBL (+0.6%), Bank AL Habib (+0.9%) and UBL (+2.5%) in the financial sector and Lucky Cement (+2.1%) in the cement sector were the major movers of the index.

Overall, profit-taking was noted in cement stocks among which Kohat Cement (-1.1%), Cherat Cement (-0.7%) and Maple Leaf Cement (-0.9%) were the major laggards.

Good volumes were witnessed in HBL and UBL in the banking sector. Traded value was slightly up by 5% to $55 million and volumes stood at 238 million shares, up 7%.

Major contribution to the volumes came from Lotte Chemical (+7.5%), Jahangir Siddiqui and Company (+2.9%), TRG Pakistan (-1.2%), Pakistan International Bulk Terminal (+2.6%), Hum Network (+7.8%) and Maple Leaf Cement (-0.9%).

“Going forward, we expect the market to remain range bound and recommend investors to sell on strength ahead of budget announcement,” the analyst said.

Overall, trading volumes rose to 238.3 million shares compared with Monday’s tally of 222.4 million. The value of shares traded during the day was Rs9.1 billion.

Shares of 357 companies were traded. At the end of the day, 190 stocks closed higher, 143 declined and 24 remained unchanged.

Lotte Chemical was the volume leader with 36.3 million shares, gaining Rs0.73 to close at Rs10.49. It was followed by Jahangir Siddiqui and Company with 13.3 million shares, gaining Rs0.37 to close at Rs13.23 and Pakistan Refinery Limited (R) with 9.8 million shares, losing Rs0.44 to close at Rs2.53.

Foreign institutional investors were net sellers of Rs503.5 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.