Market watch: Bulls dominate as stocks make sharp recovery

Benchmark KSE-100 index soars 476.77 points to settle at 44,461.01

KARACHI:

Bulls made a spectacular comeback at the Pakistan Stock Exchange on Monday, as the benchmark KSE-100 index, despite opening on a dull note, managed to soar past 44,000 points.

Investors were observed cherry-picking stocks that had dropped to attractive valuations during the previous week’s bearish spell at the bourse.

Earlier, the market endured across-the-board profit-taking owing to multiple negative triggers including the war between Russia and Ukraine, inflationary pressure in the country and increase in global crude oil prices.

Moreover, fresh depreciation of the rupee against the US dollar also dented the confidence of market players.

The index dipped to an intra-day low of 43,646 points as soon as trading began and fluctuated near that level during the first half. However, the second half registered a gradual recovery as investors started value hunting of securities at attractive prices.

At close, the benchmark KSE-100 index recorded a surge of 476.77 points, or 1.08%, to settle at 44,461.01 points.

Topline Securities, in its report, said that the market opened on a negative note in the backdrop of ongoing conflict between Russia and Ukraine and increased political noise in the country.

The index dropped 399 points (0.77%) in intra-day trading, however, some recovery was observed later in the day, as value investors came in to accumulate stocks near the 44,000 level, the report said. As a result, the index gained ground and closed at 44,461.

Bank, cement, fertiliser and power-sector stocks took the lead, among which Meezan Bank, Lucky Cement, Engro Corporation and Hub Power Company added a cumulative 164 points to the index.

On the flip side, Colgate-Palmolive, National Bank of Pakistan and TRG Pakistan lost ground and erased 36 points from the index, it said.

On the corporate results front, Searle Company unveiled its earnings for the second quarter of fiscal year 2021-22, where the company posted earnings per share of Rs2.6 (down 6% year-on-year).

“The result was higher than expectations, due to the higher-than-anticipated other income.”

A report of Arif Habib Limited stated that the market opened under pressure as inflationary concerns arose due to higher fuel prices and an overheated commodities cycle.

In the first hour of trading, the cement sector stayed in the red zone due to higher international coal prices. “Main board activity remained gloomy.”

On the flip side, the market continued to trade sideways as it witnessed hefty volumes in third-tier stocks.

In the last trading hour, value buying was observed, which led the index to close in the green zone.

Sectors contributing to the performance included fertiliser (+99 points), exploration and production (+82 points), cement (+70 points), power (+36 points) and bank (+36 points).

Overall trading volumes decreased to 208.1 million shares compared with Friday’s tally of 241.6 million. The value of shares traded during the day was Rs6.1 billion.

Shares of 340 companies were traded. At the end of the day, 226 stocks closed higher, 96 declined and 18 remained unchanged.

Agritech Limited was the volume leader with 15.7 million shares, gaining Re1 to close at Rs5.81. It was followed by TPL Properties with 14.3 million shares, gaining Rs2.16 to close at Rs31.09 and Flying Cement (R) with 12.9 million shares, losing Rs0.1 to close at Rs0.99.

Foreign institutional investors were net sellers of Rs100.03 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.