Market watch: Stocks post modest gains in range bound trading

Benchmark KSE-100 index rises 137.61 points to settle at 40,144.29

KARACHI:

Pakistan’s bourse turned bullish on Wednesday as positive news flow enticed investors to take fresh positions and the benchmark KSE-100 index posted modest gains.

Market players took positive cue from international equities and oil markets. In addition to that, Pakistani currency continued to hover around a four-month high – at slightly below Rs164 against the US dollar – for the past one week, which fuelled the uptrend in the stock market.

However, slowdown in the economy with the International Monetary Fund (IMF) seeing only 1% growth for Pakistan, fears that inflation may cross 10% and unemployment would further jump by the end of current fiscal year dented investors’ sentiment and the bourse briefly fell below the 40,000-point mark.

At close, the benchmark KSE-100 index recorded an increase of 137.61 points, or 0.34%, to settle at 40,144.29 points.

Arif Habib Limited, in its report, stated that the market traded in a narrow range and closed in the green. “The KSE-100 index opened on a positive note but concerns over political uncertainty and inflationary tendency caused investors to stay away rather than taking long positions,” it said.

Overall trading volumes remained thin for most of the session and brisk buying emerged only by the close of the session.

Oil and gas marketing, cement and steel sector stocks sustained selling pressure, despite positive expectations about the upcoming quarterly result announcements.

Sectors contributing to the positive performance included fertiliser (+21 points), textile (+19 points), cement (+17 points), power (+16 points) and oil and gas marketing (+13 points).

Individually, major gainers of the session were Allied Bank (+17 points), Hubco (+14 points), Pakistan Petroleum (+13 points), TRG Pakistan (+12 points) and Azgard Nine (+11 points).

Stocks that contributed negatively were Pakistan Oilfields (-25 points), Bank Alfalah (-15 points), Adamjee Insurance (-9 points), MCB (-7 points) and Philip Morris (-7 points).

JS Global analyst Danish Ladhani said the KSE-100 index closed at 40,144, up 137 points, after touching intraday high and low of +177 and -161 points, respectively.

“The market remained range bound with low volumes,” he said. “Although some institutional buying was observed, investors predominantly remained submissive due to apprehensions about Financial Action Task Force (FATF) meeting and overall political uncertainty.”

Oil and Gas Development Company (+0.4%), Hubco (+0.8%), Engro Corporation (+0.1%), Fauji Fertiliser (+0.1%), Shell Pakistan (+7.5%) and DG Khan Cement (+1.2%) cumulatively contributed 39 points to the index.

Traded value declined 13% to $52 million and volumes fell 20% to 233 million shares compared to the last trading session.

“Going forward, we expect the market to trade sideways and recommend investors to buy on dips,” the analyst said.

Overall, trading volumes dropped to 232.8 million shares compared with Tuesday’s tally of 290.1 million. The value of shares traded during the day was Rs8.5 billion.

Shares of 408 companies were traded. At the end of the day, 286 stocks closed higher, 108 declined and 14 remained unchanged.

Hascol Petroleum was the volume leader with 24 million shares, gaining Rs0.29 to close at Rs15.77. It was followed by Unity Foods with 21.5 million shares, gaining Rs0.34 to close at Rs17.01 and TRG Pakistan with 19.6 million shares, gaining Rs1.19 to close at Rs47.60.

Foreign institutional investors were net sellers of Rs224.5 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.