Stocks post thin gains in roller-coaster ride

KSE-100 index creeps up 41.82 points, settles at 74,878.12

KARACHI:

Pakistan Stock Exchange (PSX) on Thursday ended almost flat amid a volatile trading session and mixed investor sentiment.

Earlier, the KSE-100 index kicked off the day on a positive note and shot up to the intra-day high of 75,300.03 points within the initial hours. Investors reacted to favourable reports about the stable Pakistani rupee and net inflows of $35.6 million in T-bills.

In a topsy-turvy ride, investor interest weakened as they resorted to profit-booking, pulling the index into the negative territory, where it hit the intra-day low of 74,585.35 points. Value hunters saved the market from the intra-day low, thanks to the Ministry of Finance’s May inflation projection of 13.5-14.5%, which aided the market’s recovery.

The KSE-100 index, after a turbulent session, managed to close with slim gains.

“Stocks made recovery after the government slashed yields on treasury bonds up to 60 basis points (bps) and the finance ministry’s inflation projection of 13.5-14.5% for May, which may lead to a massive easing of policy rate in the coming months,” remarked Ahsan Mehanti, MD of Arif Habib Corp.

“The Annual Plan Coordination Committee (APCC)’s proposal for a Rs1.2 trillion development outlay in the federal budget for FY25 on the Special Investment Facilitation Council (SIFC)’s advice and foreign inflows played the role of catalysts in positive close at the PSX.”

At the close of trading, the benchmark KSE-100 index registered a slight rise of 41.82 points, or 0.06%, and settled at 74,878.12.

Topline Securities, in its report, declared it as “a tug-of-war day”. Pakistan equities had a mixed day where bullish and bearish forces fought the entire day to grab reins of the market and eventually bulls had the day in their name, it said.

Contrary to Wednesday’s momentum, the day started on a positive note. However, investors chose to do some profit-taking, which dragged the benchmark index into the negative territory.

Nonetheless, value hunters rescued the market at the day’s low, helping the index to have a positive close.

Exploration and production (E&P), bank and fertiliser sectors contributed negatively to the index where Mari Petroleum, MCB Bank, Engro Corporation, Fauji Fertiliser Company and Pakistan Services lost 37 points.

On the other hand, Millat Tractors, Service Industries and Pakistan Petroleum experienced some buying interest, resulting in a positive contribution of 39 points, Topline added.

Arif Habib Limited (AHL), in its commentary, said “with the KSE-100 below key levels, the downside risk remains”. “Red boxes on daily charts keep the bias on the lower side and it will need to be overcome to mitigate the downside risk,” AHL noted.

JS Global analyst Mohammed Waqar Iqbal said the market opened on a negative note due to mutual fund redemptions, which put some pressure. “Going forward, the market is anticipated to maintain the accumulation phase in the near term,” the analyst added.

Overall trading volumes increased to 410.6 million shares against Wednesday’s tally of 408.1 million. The value of shares traded during the day was Rs14.9 billion.

Shares of 413 companies were traded. Of these, 161 stocks closed higher, 196 dropped and 56 remained unchanged.

Fauji Cement was the volume leader with trading in 42.5 million shares, gaining Rs1.2 to close at Rs22.91. It was followed by Dewan Cement with 26.3 million shares, gaining Rs0.93 to close at Rs11.06 and Dewan Motors with 25.9 million shares, gaining Rs3.31 to close at Rs44.73. Foreign investors were net buyers of shares worth Rs223.1 million, according to the NCCPL.

Published in The Express Tribune, May 31^st, 2024.

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