Market watch: KSE rebounds after earlier US fears of sanctions

Blue chips drive the market up 350 points, recouping Monday’s losses.

KARACHI:

The stock market rebounded after yesterday’s panic selling, breaking the chain of six successive sessions of closing in the red, after no sanction related statement from the US over inauguration of the Iran-Pakistan (IP) gas pipeline project. Blue chips led the way for the market to once again eye the psychological level of 18,000.

Iran and Pakistan held a ceremony Monday to mark the beginning of work on the gas pipeline, a deal that the US had repeatedly warned may fall foul of a sanctions regime designed to prevent Iran from developing a nuclear bomb.

The market had dipped sharply the day before after investors sold shares in anticipation of possible sanctions.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index gained 2% or 350.29 points to end at 17,872.25 point level. Trade volumes fell to 211 million shares compared with Monday’s tally of 235 million shares.

“The KSE recouped Monday’s losses with gains in index heavyweight oil and banking sectors, pushing the index to close near 17,900 points,” reported Faisal Bilwani, analyst at Elixir Securities.

Value hunters were active, taking advantages of the weakness, while retail investors and day traders had a field day with the small and mid capitalised stocks, added Bilwani.

The value of shares traded during the day was Rs6.85 billion.

Engro Corporation, which had been riding a wave of bullish momentum, hit its upper price limit on the back of favourable gas allocation. Engro had signed an agreement in March, with gas producers for supply to its Enven fertiliser unit. Moreover, confirmation of gas supply restoration for Dawood Hercules’ fertiliser plants was also cheered by investors with the stock hitting its upper lock.

Pakistan Petroleum (PPL) after massive selling from various institutions rallied 3% on its previous trading spot date with a payout of Rs5 per share. On Monday, PPL clinched eleven blocks located in Sindh, Punjab and Balochistan, which will have positive impact on earnings per share once the fields are developed.

Pakistan International Airlines was the volume leader with 24.03 million shares gaining Rs0.34 to finish at Rs6.9. It was followed by Telecard with 16.85 million shares gaining Rs0.76 to close at Rs6.16 and Engro Corporation with 14.43 million shares climbing Rs6.12 to close at Rs128.65.

Foreign institutional investors were net buyers of Rs155.31 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, March 13^th, 2013.

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