Market watch: Bulls return, toss index above 42,000 mark

KARACHI:

Bulls staged a comeback at the bourse on Wednesday after giving in to selling pressure earlier and pushed the benchmark index above 42,000 points.

Bears and bulls tried to wrestle control of the stock market as a day ago Fitch Ratings warned five Asian countries including Pakistan of the impact on their credit ratings due to a potential decline in foreign currency inflows on account of workers’ remittances.

Investors’ expectations that the government would take steps to provide relief to the people following the settlement of issues with the independent power producers (IPPs) and the monetary policy announcement scheduled later this month impacted activity at the bourse.

Furthermore, uncertainty about international crude oil prices and tumbling global markets weakened investors’ sentiment and erased midday gains.

In the morning, taking cue from Tuesday’s trading session, the market opened lower and fell sharply in early trading. Some stability emerged in midday trading, but the market oscillated between red and green territories throughout the session.

At close, the benchmark KSE-100 index recorded an increase of 37.06 points, or 0.09%, to settle at 42,022.25 points.

Arif Habib Limited, in its report, stated that the market traded in a range of between -374 points and +211 points. It closed the session up by 37 points.

“Selling pressure followed the sell-off overnight in US market and the same sentiment in regional markets,” it said. “KSE-100 followed suit and saw selling pressure in exploration and production, oil marketing and cement sectors throughout the session with varying intensity.”

Selling pressure built again in Pakistan State Oil (PSO), Hascol Petroleum and UBL by the close of the session, which otherwise registered buying activity.

Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) also faced stock selling on the back of a significant decline in crude oil prices.

The technology sector posted highest volumes of 172.9 million shares, followed by oil and gas marketing companies (83.2 million) and refineries (64.8 million).

Individually, stocks that contributed positively to the index included HBL (+31 points), TRG Pakistan (+20 points), National Foods (+18 points), Lucky Cement (+14 points) and Jubilee Life Insurance (+12 points).

Stocks that contributed negatively were Oil and Gas Development Company (-31 points), Hubco (-14 points), UBL (-14 points), Pakistan Petroleum (-14 points) and Mari Petroleum (-11 points).

JS Global analyst Maaz Mulla said the market remained volatile throughout the day, touching intraday high and low of +211 and -374 points respectively. Traded value stood at $128 million while volumes came in at 707 million shares, down 20%.

The refinery sector gained ground where National Refinery (+4.6%), Attock Refinery (+1.7%), Pakistan Refinery (+3.4%) and Byco Petroleum (+10%) closed higher.

In the exploration and production sector, Pakistan Oilfields remained flat while Pakistan Petroleum (-1.3%) and Oil and Gas Development Company (-2.3%) were in the negative region as crude oil prices edged lower in the international market, he stated.

Selling pressure persisted in the cement sector where Pioneer Cement (-1.6%), Cherat Cement (-0.8%), DG Khan Cement (-0.6%), Maple Leaf Cement (-0.5%) and Fauji Cement (-1%) lost ground.

“Going forward, we expect the market to continue the similar trend and recommend investors to see any upside as an opportunity to sell,” he said. “However, we recommend that any downside should be viewed as an opportunity to buy in cement, steel, consumer and banking sectors.”

Overall, trading volumes fell to 707 million shares compared with Tuesday’s tally of 884.4 million. The value of shares traded during the day was Rs21.3 billion.

Shares of 430 companies were traded. At the end of the day, 229 stocks closed higher, 183 declined and 18 remained unchanged.

Hascol Petroleum was the volume leader with 75.6 million shares, losing Rs0.26 to close at Rs21.16. It was followed by Pakistan Telecommunication Company with 63 million shares, gaining Rs0.95 to close at Rs11.27 and Pakistan International Bulk Terminal with 57.2 million shares, gaining Rs0.15 to close at Rs13.14.

Foreign institutional investors were net sellers of Rs218.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.