Market watch: Stock market erases losses, ends in green

Benchmark KSE-100 index rises 463.41 points to settle at 41,204.36

KARACHI:

Bears were defeated at the stock market on Tuesday as the benchmark KSE-100 index recovered from the midday plunge and closed above the 41,000-point mark.

The first half of the session was marred by political uncertainty, however, investor interest revived midway and they resorted to cherry-picking of stocks which had dropped to attractive valuations.

The ensuing rally supported the index-heavy sectors, which closed in the green, particularly financial and oil sectors.

Earlier, trading began on a positive note, however, weak investor sentiment, caused by the arrest of opposition leader Shehbaz Sharif on Monday, dragged the market down.

After midday, market participants began accumulating stocks which had fallen to encouraging valuations and triggered a rally that helped the index wipe out the losses and closed with handsome gains.

At close, the benchmark KSE-100 index recorded an increase of 463.41 points, or 1.14%, to settle at 41,204.36 points.

Arif Habib Limited, in its report, stated that settlement ratios from last week’s rollover activity continued to put selling pressure on the bourse, in addition to redemption calls by mutual fund investors.

The index lost a total of 351 points earlier in the session, however, as soon as the settlement concluded, heavy buying activity took place in stocks of Hascol Petroleum, PSO and Engro, which helped erase all the losses and post a total gain of over 700 points. The index closed up by 463 points.

Oil and gas marketing companies topped the volumes with trading in 61.7 million shares, followed by cement firms (38.5 million) and technology companies (35.2 million), the report said.

JS Global analyst Maaz Mulla said recovery was witnessed at the bourse where the benchmark index moved from intraday low of -351 points to intraday high of +705 points. It closed at 41,204, up 463 points.

Traded volume stood at 354 million shares. Hascol Petroleum (+5.9%), Unity Foods (+0.1%) and K-Electric (+0.5%) were the volume leaders, contributing a cumulative 94 million shares.

The recovery was seen in cement and refinery sectors where Pioneer Cement (+2.4%), Maple Leaf Cement (+1.7%), Lucky Cement (+2%), National Refinery (+2.1%), Attock Refinery (+2.6%), Byco (+7.9%) and Pakistan Refinery (+4.6%) were the major movers.

The technology sector enjoyed the upward rally where TRG Pakistan (+3.7%), NetSol (+6.1%) and Avanceon Limited (+7.4%) gained ground compared to their previous day’s close.

Searle (-1.8%) from the pharmaceutical sector declared its FY20 result, where the company posted earnings per share of Rs11.56 with cash payout of Rs2.50 per share.

“Going forward, we recommend investors to book profit on strength and consider any downside as a buying opportunity,” the analyst said.

Overall, trading volumes dropped to 353.7 million shares compared with Monday’s tally of 407.2 million. The value of shares traded during the day was Rs13.8 billion.

Shares of 412 companies were traded. At the end of the day, 277 stocks closed higher, 115 declined and 20 remained unchanged.

Hascol Petroleum was the volume leader with 50.2 million shares, gaining Rs1.2 to close at Rs21.7. It was followed by Unity Foods with 22.6 million shares, gaining Rs0.02 to close at Rs17.47 and K-Electric with 21.2 million shares, gaining Rs0.02 to close at Rs4.23.

Foreign institutional investors were net sellers of Rs674.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.