Market watch: Stocks recoup losses on investor confidence
Stocks logged gains on Wednesday, erasing all of their losses from the previous day's selloff as the KSE-100 index rose over 400 points amid range-bound trading.
Investors' interest revived over anticipation of policy announcements for textile manufacturers, banks and oil and gas marketing companies. The mood, however, remained less cheerful, which kept trading in a narrow range throughout the day.
The international oil market remained positive, which positively impacted oil-related stocks.
Earlier, trading began with a spike and stocks rallied in a buying spree. Some of the dips were corrected immediately and the index closed with handsome gains.
At close, the benchmark KSE-100 index recorded an increase of 412.49 points, or 0.95%, to settle at 43,694.76 points.
Arif Habib Limited, in its report, stated that the market regained the points lost on Tuesday in the aftermath of selling from financial institutions. "Buyers remained cautious in the beginning and activity gained momentum as the day progressed, especially in the absence of active selling," it said.
"International crude oil prices traded positive but in a narrow band that offered no incentive to the sellers to book profit at this stage."
Buying activity was witnessed in textile firms, banks and oil and gas marketing companies in anticipation of a change or announcement of government policies.
Sectors contributing to the performance included technology (+92 points), banks (+50 points), textile (+44 points), exploration and production (+32 points) and food (+28 points).
Individually, stocks that contributed positively to the index included TRG Pakistan (+63 points), Systems Limited (+30 points), UBL (+29 points), Pakistan Oilfields (+25 points) and Kohinoor Textile Mills (+18 points).
Stocks that contributed negatively included Bank AL Habib (-27 points), Fauji Cement (-5 points), K-Electric (-4 points), Mari Petroleum (-3 points) and Shell Pakistan (-2 points).
JS Global analyst Danish Ladhani said the benchmark KSE-100 index closed 412 points positive at 43,695 after touching intraday high of +468 points.
The market remained bullish with interest mostly seen in refineries and technology stocks, among which Attock Refinery (+7.1%), Pakistan Refinery (+7.5%), TRG Pakistan (+7%), NetSol (+7.4%) and Avanceon (+6.3%) closed in the green, he said.
Activity was witnessed in side board stocks where Pakistan Refinery (+7.5%), TRG Pakistan (+7%), Unity Foods (+1.3%), Hascol Petroleum (+1.4%), K-Electric (-1.5%), Azgard Nine (+7.5%) and Fauji Foods (+2%) cumulatively added 166 points.
"Moreover, health authorities in Pakistan announced that three persons who recently returned from the United Kingdom could be infected with the new strain of coronavirus that originated in the UK," he added.
"Moving forward, we expect the market to remain bullish and recommend investors to buy on dips," the analyst said.
Overall, trading volumes fell to 456 million shares compared with Tuesday's tally of 503.1 million. The value of shares traded during the day was Rs22.6 billion.
Shares of 423 companies were traded. At the end of the day, 310 stocks closed higher, 96 declined and 17 remained unchanged.
Pakistan Refinery was the volume leader with 55.3 million shares, gaining Rs1.62 to close at Rs23.28. It was followed by TRG Pakistan with 31.2 million shares, gaining Rs5.94 to close at Rs90.91 and Unity Foods with 18.5 million shares, gaining Rs0.42 to close at Rs32.04.
Foreign institutional investors were net sellers of Rs87.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.