Market watch: KSE-100 recoups losses, closes above 43,500

Benchmark index adds 318.76 points to settle at 43,522.55

KARACHI:

The Pakistan Stock Exchange made a U-shaped recovery on Thursday as the benchmark KSE-100 index erased losses, suffered in the first half of trading session, to close above the 43,500-point mark.

Investor interest stemmed from anticipation of the resolution of domestic political issues, however, a jump in yields in the latest T-bills auction in the secondary market sparked volatility and capped gains at the bourse.

A halt to the rupee’s slide against the US dollar, which remained unchanged during the session, aided the uptrend in the stock market.

Despite uncertainty, the refinery and exploration and production sectors outperformed others, closing the day with modest gains.

Following a short-lived spike at the beginning of the session, the KSE-100 index entered the negative zone and remained there for most of the day. A buying spree in the final hour, emerging in the wake of cherry-picking by investors, helped the market to recover and close in the green.

At close, the benchmark KSE-100 index recorded an increase of 318.76 points, or 0.74%, to settle at 43,522.55 points.

A report of Arif Habib Limited stated that a volatile session was observed at the bourse due to an uptick in the auction result of Market Treasury Bills.

The cut-off yields on three to 12-month T-bills stood higher compared to the longer-tenure papers like three to 10-year Pakistan Investment Bonds (PIBs), it pointed out.

“The market opened in the green zone but the battle between bulls and bears continued throughout the day,” the report said.

“Main board activity remained dull. On the flip side, activity continued to remain sideways as the market witnessed hefty volumes in third-tier stocks.”

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

JS Global analyst Mubashir Anis Naviwala said that another dull session was witnessed at the bourse.

“Uncertainty about domestic politics and the economic outlook kept investors away from healthy participation,” he said. “Selling pressure was observed across the board but the market recovered in the last hour on expectation of resolution of the political issues.”

The index closed at 43,522, gaining 319 points compared to the previous trading session.

Major contribution to the traded volume of 150 million shares came from Treet Corp (+2.8%), TRG Pakistan (+5.5%), Telecard Limited (+2.9%), TPL Properties (+1.8%) and UBL (-0.8%), he said.

“Going forward, we expect range-bound activity in the market and recommend investors to focus on good dividend-yielding stocks and avail any downside as an opportunity to buy in the banking and exploration and production sectors,” the analyst added.

Overall trading volumes rose to 149.8 million shares compared with Tuesday’s tally of 138.3 million. The value of shares traded during the day was Rs5.6 billion.

Shares of 334 companies were traded. At the end of the day, 178 stocks closed higher, 132 declined and 24 remained unchanged.

Treet Corp was the volume leader with 20.8 million shares, gaining Rs0.83 to close at Rs30.9. It was followed by TRG Pakistan with 10.2 million shares, gaining Rs3.98 to close at Rs76.38 and Telecard Limited with 9.4 million shares, gaining Rs0.29 to close at Rs10.39.

Foreign institutional investors were net sellers of Rs649.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.