Market watch: Stocks end week in red amid range-bound trading

KARACHI:

In line with the performance during the week, the stock market once again slipped into the red zone in range-bound trading on Friday and lost about 100 points.

The benchmark KSE-100 index opened downwards and despite brief spikes, it continued its march towards south. Persistent selling pressure pushed the index downwards.

For a brief period, the index crossed 42,000 points, but it was followed by a significant correction. Almost all the major stocks felt the impact of uncertainty including exploration and production, cement and financial.

Talk of the Competition Commission of Pakistan (CCP) raiding the head office of All Pakistan Cement Manufacturers’ Association (APCMA) weighed on investors’ sentiment as many market players opted to stay on the sidelines.

A brief stay of the index in the green came on the back of news that the government had contained the budget deficit at Rs440 billion or less than 1% of the size of national economy in first two months of the current fiscal year.

At close, the benchmark KSE-100 index recorded a decrease of 105.14 points, or 0.25%, to settle at 41,701.23 points.

Arif Habib Limited, in its report, stated that the last day of the rollover week replicated what was witnessed during most of the sessions in the outgoing week, ie range-bound performance and selling pressure.

Exploration and production, cement and banking stocks contributed to the downside in the index. Oil and Gas Development Company and Pakistan Petroleum faced selling pressure in the market-on-close session, it said.

Selling pressure continued on cement sector stocks due to fears of Competition Commission’s raid on the APCMA.

Oil and gas marketing companies led the volumes with 64.1 million shares changing hands, followed by vanaspati firms (47.5 million) and refineries (43.6 million).

Individually, stocks that contributed positively to the index included HBL (+30 points), Colgate-Palmolive (+21 points), Byco Petroleum (+12 points), Hascol Petroleum (+11 points) and Kot Addu Power Company (+11 points).

Stocks that contributed negatively were Lucky Cement (-39 points), UBL (-22 points), TRG Pakistan (-22 points), DG Khan Cement (-16 points) and Murree Brewery (-14 points).

JS Global analyst Maaz Mulla said the benchmark index touched intraday high of +294 points and dropped to a low of -204 points. “The bearish sentiment can be attributed to the last day of the futures rollover week,” he added.

Sazgar Engineering Works (+7.5%) from the auto sector declared earnings per share of Rs0.96 with 30% bonus payout in its FY20 result.

“Going forward, we expect the market to trade sideways due to absence of any immediate triggers and recommend investors to sell on strength,” the analyst said.

Overall, trading volumes edged up to 435 million shares compared with Thursday’s tally of 434.9 million. The value of shares traded during the day was Rs15.4 billion.

Shares of 411 companies were traded. At the end of the day, 161 stocks closed higher, 232 declined and 18 remained unchanged.

Hascol Petroleum was the volume leader with 57.5 million shares, gaining Rs0.83 to close at Rs21.91. It was followed by Unity Foods with 47.5 million shares, losing Rs0.08 to close at Rs17.96 and Byco Petroleum with 28.4 million shares, gaining Re1 to close at Rs11.01.

Foreign institutional investors were net sellers of Rs499.72 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.