Market watch: Stock market reverses trend, gains 52 points

Benchmark KSE-100 index rises 0.12% to settle at 42,334.76

KARACHI:

After receding for two successive days, the KSE-100 index of the Pakistan Stock Exchange reversed trend on Thursday and edged up about 50 points in a topsy-turvy session.

Market expectation for a status quo in the upcoming monetary policy announcement by the State Bank of Pakistan, scheduled for Monday next week, prevented the bourse from posting handsome gains.

Automobile, cement and fertiliser sectors bore the brunt of weak investor sentiment and most of the stocks in those sectors recorded losses.

A slight recovery in global crude oil prices lent support to the bourse and aided its uptrend.

Earlier, trading kicked off on a positive note and the index surpassed the 42,500-point mark in initial deals. The uptrend continued for some time, however, selling pressure emerged towards noon and wiped off most of the gains. Nevertheless, the KSE-100 index managed to close in the green.

At close, the benchmark KSE-100 index recorded an increase of 52.48 points, or 0.12%, to close at 42,334.76 points.

Arif Habib Limited, in its report, stated that the market opened on a positive note with +193 points and added a total of 350 points to the index. Selling pressure eroded most of the gains by the end of the session and the index closed up by just 53 points.

Financial results of DG Khan Cement helped the company's stock post price gains. Among technology stocks, Pakistan Telecommunication Company hit its upper circuit whereas Engro Polymer in the chemical sector touched recent highs.

The technology sector topped the volumes with trading in 108.6 million shares, followed by power firms (47.5 million) and vanaspati companies (45.2 million), the report added.

JS Global analyst Maaz Mulla said the benchmark index opened positive and touched a high of +350 points. "The market remained in the green throughout the day and closed at 42,335 (+52 points)," he said.

Overall volumes stood at 509 million shares while traded value came in at $91 million.

Pakistan Telecommunication Company (+8.8%), Unity Foods (+3.2%), Fauji Foods (+2.3%) and Hascol Petroleum (-1.4%) contributed a cumulative 193 million shares to the total volume.

Mughal Iron and Steel Industries (+5.3%) from the steel sector declared its FY20 result, where the company posted earnings per share of Rs2.36 with no cash payout.

Furthermore, DG Khan Cement (+0.9%) declared its FY20 result, where the company posted loss per share of Rs4.93 with no cash dividend.

Major movers of the day were Engro Polymer (+6.5%), Engro (+0.5%), Pakistan Oilfields (+1.1%), PSO (+1.3%), Pakistan Telecommunication Company (+8.8%) and Oil and Gas Development Company (+0.1%), which drove the index into the positive territory.

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

Overall, trading volumes rose to 508.7 million shares compared with Wednesday's tally of 489.6 million. The value of shares traded during the day was Rs15.1 billion.

Shares of 414 companies were traded. At the end of the day, 200 stocks closed higher, 197 declined and 17 remained unchanged.

PTCL was the volume leader with 78.7 million shares, gaining Rs0.95 to close at Rs11.71. It was followed by Unity Foods with 45.2 million shares, gaining Rs0.52 to close at Rs16.83 and Hascol Petroleum with 35 million shares, losing Rs0.31 to close at Rs22.09.

Foreign institutional investors were net sellers of Rs216.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.