Market watch: Oil sector helps KSE-100 recoup losses
Shares of 393 companies were traded. At the end of the day, 208 stocks closed higher. PHOTO: FILE
Stocks were back on track on Wednesday as bulls re-appeared to take control of the market after two days of consolidation.
Investors had several reasons to accumulate stocks which included a rally in global markets, hike in international oil prices and approval of a $300 million loan by the World Bank for financing two projects in Pakistan.
While investors cheered economic developments, the overall sentiment remained mixed as market players were concerned over the looming political unrest due to the decision taken by the Pakistan Democratic Movement (PDM) to hold its Lahore rally as per plan on December 13 amid rising coronavirus cases.
Earlier, the market opened on a positive note and touched the intra-day high within minutes but battered sentiment over political uncertainty dragged the index into negative territory later. However, the index still managed to recover and close with modest gains.
At close, the benchmark KSE-100 index recorded an increase of 102.25 points, or 0.24%, to settle at 42,204.03 points.
Arif Habib Limited, in its report, stated that the market discounted all the hype created by the opposition parties regarding the plan for tendering resignations from the national and provincial assemblies.
“The banking sector played a vital role as HBL and UBL took charge after remaining calm for almost two months since the announcement of 3QCY20 financial results,” it said.
International crude prices went up, trading +1% that helped exploration and production sector stocks advance.
The report added that chemical and oil and gas marketing companies also contributed to the positivity and helped the index stay above 42,200.
Sectors contributing to the performance included exploration and production (+44 points), technology (+20 points), power (-13 points), tobacco (-10 points) and auto (-6 points).
Individually, stocks that contributed positively to the index included TRG Pakistan (+30 points), Oil and Gas Development Company (+24 points), Pakistan Petroleum (+12 points), UBL (+11 points) and HBL (+10 points).
Stocks that contributed negatively were Hubco (-18 points), Pakistan Tobacco Company (-9 points), Bank AL Habib (-9 points), Systems Limited (-9 points) and Maple Leaf Cement (-8 points).
JS Global analyst Danish Ladhani said the benchmark KSE-100 index was restricted between a high of 248 points and low of 71 points. It closed the session at 42,204, up 102 points.
Overall, the market traded sideways with activity mostly seen in exploration and production and financial sectors where Oil and Gas Development Company (+1.6%), UBL (+0.8%), HBL (+0.5%), Pakistan Petroleum (+0.9%), NBP (+1.9%) and Pakistan Oilfields (+0.6%) were the major movers.
Volumes stood at 438 million shares. TRG Pakistan (+3.9%), Lotte Chemical (+7.1%), Unity Foods (+2.3%), Hascol Petroleum (+0.5%) and Maple Leaf Cement (-1.7%) led the volumes with a cumulative 133 million shares changing hands.
Ladhani added that the market may remain under duress on political grounds as the PDM had announced that all members of parliament belonging to its constituent parties would submit their resignations.
“Furthermore, Federal Minister for Planning and Development Asad Umar has warned that the government may have no choice but to impose further restrictions over the next two weeks if the violation of coronavirus standard operating procedures (SOPs) continues,” he stated.
“Moving forward, we recommend investors to book short-term gains amid the consolidation phase,” the analyst said.
Overall, trading volumes surged to 438.1 million shares compared with Tuesday’s tally of 409.7 million. The value of shares traded during the day was Rs18.96 billion.
Shares of 393 companies were traded. At the end of the day, 208 stocks closed higher, 162 declined and 23 remained unchanged.
TRG Pakistan was the volume leader with 33.7 million shares, gaining Rs2.85 to close at Rs75.72. It was followed by Lotte Chemical with 27.2 million shares, gaining Rs0.94 to close at Rs14.18 and Unity Foods with 26.2 million shares, gaining Rs0.62 to close at Rs27.92.
Foreign institutional investors were net sellers of Rs115.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.