Market watch: Cherry-picking helps KSE-100 recover
In a turbulent session at the bourse, the KSE-100 index on Thursday recouped losses to close positive, aided by cherry-picking from investors, who bought stocks at attractive valuations.
Rising number of Covid-19 cases across the country may lead to the imposition of micro smart lockdown in major cities, which turned investor mood gloomy and they resorted to divesting their holdings.
Despite the positive close, stocks from index-heavy sectors faced substantial sell-off and a majority of them ended the day with losses.
After a brief open in the positive zone, the KSE-100 index succumbed to volatility and oscillated between positive and negative territories till midday. Buoyed by cherry-picking, a rally emerged at midday, which helped the index erase losses and close with gains.
At close, the benchmark KSE-100 index recorded an increase of 105.44 points, or 0.26%, to settle at 40,676.92 points.
Arif Habib Limited, in its report, stated that selling pressure continued unabated on Thursday, which pushed the index down by another 458 points during the session.
However, sporadic buying of blue chip stocks, especially cement stocks, HBL and UBL among banks and PSO among oil and gas marketing companies, brought the index back into the positive zone.
“Last half hour saw the index post gain of 110 points (unadjusted),” it said. “Past sessions have seen the effect of redemption by mutual fund investors cause havoc in an otherwise calm market.”
The market lost roughly 2,000 points from its recent highs and in the process caused attrition in cement, steel and banking sector stocks, it said.
JS Global analyst Danish Ladhani said the benchmark KSE-100 index touched high and low of +164 and -458 points respectively, before closing at 40,677, up 0.26%.
“Trading remained lacklustre in early hours of the session but value buying was witnessed at the bottom, which pushed the market into positive territory,” he said.
Financial and exploration and production stocks were major gainers of the day where UBL (+2.2%), HBL (+1.4%), MCB (+1.8%), Oil and Gas Development Company (+0.6%) and Pakistan Oilfields (+0.1%) closed in the green.
HBL moved up as the US Federal Reserve board announced the termination of enforcement actions with Habib Bank Limited Pakistan and Habib Bank Limited New York branch.
Moreover, crude oil prices in the international market were higher on the back of stimulus hopes.
Traded value stood slight lower at $76 million, down 19% and volumes came in at 372 million shares, down 22%.
“Going forward, we expect the market to trade sideways due to political uncertainty and recommend investors to sell on strength,” the analyst said.
Overall, trading volumes dropped to 371.7 million shares compared with Wednesday’s tally of 473.7 million. The value of shares traded during the day was Rs12.5 billion.
Shares of 399 companies were traded. At the end of the day, 153 stocks closed higher, 230 declined and 16 remained unchanged.
Hascol Petroleum was the volume leader with 67.6 million shares, losing Rs1.51 to close at Rs18.67. It was followed by K-Electric with 28.9 million shares, losing Rs0.06 to close at Rs4.15 and Unity Foods with 26.1 million shares, losing Rs0.49 to close at Rs16.16.
Foreign institutional investors were net sellers of Rs29.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.