The stock market endured a turbulent session on Thursday as the benchmark KSE-100 index climbed during early hours and lost more than half of the gains till the day’s end. Nevertheless, strong investor interest helped the index close with modest gains.
Unrest in Quetta and a lack of clarity about negotiations between government officials and protesters sparked selling at the bourse and investors adopted a cautious stance.
Removal of customs duty on 152 tariff lines by the government coupled with anticipated announcement of a new textile policy triggered a short-lived rally in the textile and chemical sectors.
The KSE-100 index jumped as soon as trading began and climbed close to 500 points in the first few hours. The index managed to sustain the uptrend till midday, however, it failed to carry it past afternoon as investors began offloading stocks, leading to a steep drop in the market. Late-session buying elevated the index again and helped it close in the green.
At close, the benchmark KSE-100 index recorded an increase of 191.12 points, or 0.42%, to settle at 45,344.54 points.
Arif Habib Limited, in its report, stated that the market added a total of 466 points during the session, where the start was very fast-paced, although profit-booking in the rest of the session brought the index down.
Profit-booking was witnessed in the exploration and production, cement, steel and oil and gas marketing sectors whereas aggressive buying was observed in the banking and fertiliser sectors.
The developing situation pertaining to protests in Quetta and government’s laggard approach to meet protesters’ demands caused concern among investors.
News of removal of additional customs duty on 152 tariff lines helped textile and related chemical stocks to perform better but profit-booking brought stock prices down by the end of the session, the report said.
JS Global analyst Maaz Mulla said bulls continued to dominate stock trading with the market touching a high of +466 points but then lost the momentum and closed up by 191 points at 45,345.
A total of 641 million shares were traded where most of the contribution came from Byco (+0.2%), Power Cement (0%), Kapco (+4.7%), Pakistan Refinery (-1%) and Pak Elektron (+0.8%).
Market channels suggest that the government was set to unveil an ambitious textile policy with cash subsidy and other incentives to boost exports.
Furthermore, the policy could attract domestic and foreign investment in the textile value chain and the development of value-added sectors, with prime focus on small and medium enterprises (SMEs).
It gave a boost to the textile sector, where Interloop (+3%), Crescent Textile Mills (+2.7%), Feroze 1888 Mills (+3.2%), Nishat Mills (+1.2%) and Kohinoor Textile Mills (+1.4%) closed higher.
The banking sector enjoyed a heavy investor participation where UBL (+6%), HBL (+1.9%), Bank AL Habib (+2%), Bank Alfalah (+1.7%) and Allied Bank (+1.2%) were the major movers as most of the sector’s stocks remained in the green.
Despite oil prices edging higher in the international market, selling pressure was witnessed in Oil and Gas Development Company (-1.2%) and Pakistan Petroleum (-1.9%), which lost ground.
“Going forward, we recommend investors to consider any dip as a buying opportunity in the market,” the analyst said.
Overall, trading volumes dropped to 641.4 million shares compared with Wednesday’s tally of 664.5 million. The value of shares traded during the day was Rs25.5 billion.
Shares of 407 companies were traded. At the end of the day, 168 stocks closed higher, 222 declined and 17 remained unchanged.
Byco Petroleum was the volume leader with 94.9 million shares, gaining Rs0.02 to close at Rs9.81. It was followed by Power Cement with 34.2 million shares, closing unchanged at Rs10.42 and Kot Addu Power Company with 32.2 million shares, gaining Rs1.61 to close at Rs35.95.
Foreign institutional investors were net buyers of Rs381.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ