Market watch: Stock market undergoes correction

Benchmark KSE-100 index drops 64.36 points to close at 48,126.90

KARACHI:

The three-day winning streak at the Pakistan Stock Exchange (PSX) came to an end on Wednesday with a slight drop of over 60 points in the benchmark KSE-100 index amid a lack of positive triggers.

The index displayed volatility and moved between intra-day high and low of 95 and 231 points respectively.

Absence of positive cues kept investors cautious throughout the trading session. Profit-booking was noted in cement, exploration and production and fertiliser sectors.

Earlier, taking cue from Tuesday’s performance, stock trading began on a bullish note, but bears soon took over and dominated market proceedings throughout the session.

At close, the benchmark KSE-100 index recorded a decrease of 64.36 points, or 0.13%, to settle at 48,126.90.

Arif Habib Limited, in its report, stated that the market traded range bound, oscillating between +95 points and -231 points. It closed the session down by 64 points.

Exploration and production, cement, bank and fertiliser sectors saw profit-booking. Kot Addu Power Company and Pakistan State Oil fared well on expectation of release of payments related to circular debt.

A persistent increase in coal prices over the past couple of weeks eclipsed performance of the cement sector, the report added.

Sectors contributing to the performance included exploration and production (-50 points), cement (-29 points), banks (-25 points), technology (-23 points) and fertiliser (-11 points).

Individually, stocks that contributed positively to the index included Kot Addu Power Company (+15 points), NBP (+14 points), Honda Atlas Cars (+14 points), Shifa International Hospitals (+13 points) and Unity Foods (+13 points).

Stocks that contributed negatively were HBL (-35 points), Oil and Gas Development Company (-21 points), Lucky Cement (-16 points), TRG Pakistan (-14 points) and Pakistan Petroleum (-10 points).

JS Global analyst Maaz Mulla said that the KSE-100 index remained volatile throughout the day, touching intra-day high and low of 48,286 and 47,960 points respectively.

Total volumes for the day were recorded at 1.04 billion shares where volume movers were WorldCall Telecom (0%), Byco Petroleum (-0.8%), Pakistan Telecommunication Company (-1.5%), Unity Foods (+2.2%) and Azgard Nine (+4.2%).

Refineries got a boost during the trading session, among which National Refinery (+3.4%), Attock Refinery (+1.1%) and Pakistan Refinery (+2.5%) closed in the green on news reports that the government was likely to approve incentives for the oil refineries in the upcoming budget for 2021-22.

Activity was witnessed in the auto sector as well, where Honda Atlas Cars (+6.2%), Sazgar Engineering Works (+3%), Ghandhara Industries (+1.1%) and Pak Suzuki Motor Company (+1.2%) were the major gainers.

On the news front, the government was considering different proposals for abolishing around two dozen withholding taxes, he said.

“Moving forward, the market is expected to continue its bullish trend and investors are advised to view any dip as a buying opportunity in construction and export-oriented sectors,” the analyst said.

Overall trading volumes dropped to 1.04 billion shares compared with Tuesday’s tally of 1.39 billion. The value of shares traded during the day was Rs27.8 billion.

Shares of 428 companies were traded. At the end of the day, 216 stocks closed higher, 194 declined and 18 remained unchanged.

WorldCall Telecom was the volume leader with 202.7 million shares and no price change to close at Rs3.59. It was followed by Byco Petroleum with 59.1 million shares, losing Rs0.09 to close at Rs11.41 and Pakistan Telecommunication Company with 36.2 million shares, losing Rs0.17 to close at Rs11.06.

Foreign institutional investors were net buyers of Rs48.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.