Market watch: Stocks recover after falling in early trade

Benchmark KSE-100 index gains 529.69 points.

KARACHI: The equities bounced back strongly on a day that saw sharp swings with the KSE benchmark index settling near 33,500 points on healthy turnover.

At close on Tuesday, the Karachi Stock Exchange (KSE) 100-share index recorded an increase of 1.61% or 529.69 points to end at 33,474.17.



According to Elixir Securities analyst Faisal Bilwani, stocks plummeted to test 32,600 in early trade with little investor participation. However, reports of institutional buying, particularly by state funds and local banks, brought some respite.

Turnaround in the wider market came with the support of lagging cement stocks as rumours, which were later confirmed, of no capacity expansion by Lucky Cement (+3.4%) pushed the sector up.

“Notably, Maple Leaf Cement (+2.9%), which traded at the lower lock intraday, shot up to near the upper price limit ahead of earnings announcement,” he said.

“Oil shares also supported gains in the broader market, while financial stocks attracted institutional flows as investors see gains of 300 to 500 points before profit-taking sets in.”

Cement companies would possibly remain in the limelight and help recover some of the recent losses while small and mid-caps would lead volumes and likely see a 3-6% upside from Tuesday’s closing on retail activity, added Bilwani.

Meanwhile, JS Global analyst Saeed Ahmad Khan was of the view that positivity prevailed in the cement sector as local funds showed interest in the category.

“Lucky Cement announced a better-than-expected full-year EPS of Rs42.52 and did not announce expansion plans, sparking hopes that price consensus (among cement manufacturers) will continue.”

Major gainers of the sector were Cherat Cement Company (+4.83%) and Fauji Cement Company (+3.48%).



“The oil sector saw positivity after midday as international crude oil prices recovered 1%; major gainers of the sector were National Refinery Limited (+5%) and Attock Refinery Limited (+3.92%),” added Khan.

Trade volumes rose to 291 million shares compared with Monday’s tally of 218 million shares.

Shares of 359 companies were traded. At the end of the day, 250 stocks closed higher, 94 declined and 15 remained unchanged. The value of shares traded during the day was Rs13.1 billion.

Dewan Cement was the volume leader with 22.9 million shares, gaining Rs0.87 to finish at Rs17.88. It was followed by Pak Elektron with 19 million shares, gaining Rs0.45 to close at Rs79.88 and Sui Northern Gas Pipelines with 14.4 million shares, gaining Rs0.99 to close at Rs34.80.

Foreign institutional investors were net sellers of Rs119  million worth of shares during the trade session, according to data compiled by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, September 9^th,  2015.

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