Stocks inch up on institutional interest in oversold scrips

Stocks recovered slightly on Tuesday following choppy trade as oversold financial, cement, and fertiliser shares triggered institutional interest, dealers said.

Shumaila Badar, head of research at Ismail Iqbal Securities said the benchmark KSE-100 index gained on the back of cement and fertiliser stocks. Cement sector rallied after news that players in the north have increased prices by Rs10/bag, while fertiliser sector gained after news that Engro Fertilizer (EFERT) and Fauji Fertilizer Company (FFC) have increased urea prices by Rs50/bag.

“We expect the market to trade range-bound ahead of the elections next week. Beyond the elections, we expect a rally regardless of who forms the government, unless there is a hung parliament,” she said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index rose 0.67 percent or 267.21 points to close at 39,932.98 points. KSE-30 shares index rose 0.66 percent or 128.47 points to finish at 19,660.41 points.

Of 340 active scrips, 229 advanced, 91 declined, and 20 remained unchanged. The ready market volumes stood at 141.973 billion shares compared to a turnover of 147.480 billion shares in the previous session.

Analyst Ahsan Mehanti from Arif Habib Corporation said, “Stocks showed recovery led by scrips across the board on institutional interest in oversold scrips.” Investor speculation on likely impact to rupee stability of central bank’s margin restriction on import of non-essential items led late session support.

“Rising trend in banking spreads, higher local cement prices and upbeat data on auto sales for July-June 2018 played a catalytic role in the bullish close,” Mehanti added. Zainul Abedin from Elixir Securities said, “With Supports developing around 39,500/200 levels, we see further continuation towards 40,600/800 levels in the days ahead,” he added.

Seasoned investors were concerned about rupee slide, decline in foreign exchange reserves, and a clear indication from the caretaker setup that the new government would seek International Monetary Fund programme to support the ailing economy, a leading dealer said.

The highest gainers were Nestle Pakistan, up Rs520.00 to close at Rs10,920.00/share, and Colgate Palmolive, up Rs135.00 to finish at Rs3,194.00/share.

Companies that booked highest losses were Phillip Morris Pakistan, down Rs137.27 to close at Rs2,068.23/share, and Bhanero Textile, down Rs40.74 to close at Rs774.25/share.

Fauji Cement recorded the highest volumes with a turnover of 17.741 million shares. The bank’s scrip gained Rs0.8 to close at Rs20.04/share. It was followed by TRG Pakistan Limited with a turnover of 8.054 million shares, whereas the scrip gained Rs1.12 to close at Rs27.10/share.

The lowest volumes were witnessed in Pakistan International Bulk, recording a turnover of 7.122 million shares. Its scrip lost Rs0.14 to end at Rs0.50 /share.