Market watch: Stocks rally, but volumes hit 22-month low
Shares of 324 companies were traded. At the end of the day, 190 stocks closed higher, 104 declined and 30 remained unchanged. PHOTO: REUTERS
Despite the continuing political uncertainty and fast depreciating rupee, the Pakistan Stock Exchange managed to post decent gains on Wednesday but trading volumes remained thin.
The market saw the volumes dip to around 22-month low, however, it remained in the green zone throughout the day. The benchmark KSE-100 index added 183 points and settled above the psychological barrier of 44,000.
The positivity was said to have stemmed from the dip in global crude oil prices.
On the flip side, a gloomy macroeconomic outlook mainly owing to the persistently depreciating rupee against the US dollar, which touched a new record low at Rs186.13 in the inter-bank market, coupled with political chaos continued to spark pessimism among market players.
Despite the negative cues, the trading session commenced on a positive note and the benchmark index surged to an intra-day high of 44,378 points during the first half.
However, the second half witnessed some profit-taking, which erased some of the gains. However, the market managed to notch up modest gains in the end.
At close, the benchmark KSE-100 index recorded an increase of 183.02 points, or 0.42%, to settle at 44,111.10 points.
Topline Securities, in its report, said that Pakistan equities closed in the green zone despite political uncertainty and unstable economic conditions.
“The market opened the session on a positive note and hit an intra-day high of 449 points,” it said.
Major positive contributors were Engro Corporation, Hub Power Company, Dawood Hercules Corporation, Systems Limited and Engro Polymer and Chemicals, which cumulatively added 144 points to the index, Topline said.
A report of Arif Habib Limited stated that a positive day was observed at the Pakistan Stock Exchange, as the KSE-100 index remained in the green zone throughout the day.
PSX, however, witnessed 22-month low volumes amid Ramazan and political uncertainty, the report said, adding that the traded value decreased 7% day-on-day.
“Activity remained sideways due to political noise and devaluation of Pakistani rupee against the US dollar. Value buying was observed in the fertiliser sector,” it said.
“In the last trading hour, across-the-board profit-taking was witnessed.”
Sectors contributing to the performance included fertiliser (+64.4 points), banks (+36 points), technology and communications (+30.8 points), power (+28.7 points) and investment banks (+25.3 points).
JS Global analyst Neelam Naz said that the KSE-100 index breached the psychological resistance of 44,000 points and closed at 44,111, after hitting intra-day high of 44,378.
Treet Corporation (+3%), Telecard Limited (+2.4%), Engro Polymer and Chemicals (+3.5%), and Ghani Global Holdings (+2%) were the top contributors in terms of volumes, she said.
The fertiliser sector was in the limelight over expectations of better offtake numbers for the previous quarter.
“Going forward, we recommend investors to stay cautious,” the analyst said, adding “a buy-on-dip strategy is advised for value stocks”.
Overall trading volumes dipped to 108.4 million shares compared with Tuesday’s tally of 115.6 million. The value of shares traded during the day was Rs4.3 billion.
Shares of 324 companies were traded. At the end of the day, 190 stocks closed higher, 104 declined and 30 remained unchanged.
Treet Corporation was the volume leader with 13.4 million shares, gaining Rs0.94 to close at Rs32.71. It was followed by Telecard Limited with 11.97 million shares, gaining Rs0.34 to close at Rs14.55 and Engro Polymer with 5.6 million shares, gaining Rs2.51 to close at Rs75.15.
Foreign institutional investors were net sellers of Rs96.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.