The benchmark index ended flat on Thursday as fast depreciation in rupee led to sharp adjustment in share prices, with continuous selling from foreign fund houses squeezing the overall gains made in early session, dealers said.
An analyst from Topline Securities said, “The market responded positivity to measures taken by the government to support the stock market, as it opened on a positive note and gained to make an intraday high of 963 points.”
The measures included abolishment of capital value tax (CVT) on capital market transactions in addition to previously announced measures where bank borrowing for AMCs was increased from 90 to 360 days and restrictions were introduced on short selling.
However, due to looming threat of covid-19, where number of reported cases continued to grow, selling was observed during the later hours, the analyst said.
Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.14 percent or 38.40 points to close at 27,267.20 points level. KSE-30 shares index followed suit with a high of 0.38 percent or 45.36 points to end at 11,879.19 points level.
Of 347 active scrips, 152 went up, 182 retreated, and 13 remained unchanged. The ready market volumes stood at 186.745 million shares, as compared with the turnover of 145.106 million shares in the previous session.
Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks showed recovery led by selected scrips, as investor weighed bull run in global equities, Rs1.2 trillion government economic relief package, and 150bps cut in SBP key policy rate.”
Recovery in international crude oil prices, approvals of $1.5 billion ADB and $1 billion World Bank support, along with likely approval of $1.4 billion IMF loan to fight virus outbreak played a catalytic role in the bullish close, Mehanti added.
Ovais Ahsan, chief executive officer at Optimus Capital Management, said, “The market lost intraday gains on concern over the rupee losing ground to the dollar, while notices of major companies shutting their operations in the wake of the coronavirus also created a risk off mood.”
The government’s measures to support the market were met with enthusiasm initially after the opening bell, as the KSE-100 gained over 2 percent, but the gains were lost to selling pressure towards the close as participants chose to be cautious, Ahsan said.
Faizan Munshey, head of foreign sales at Next Capital, said, “Stock market opened higher and went up by 963 points within the first two hours of trading amid recovery in world markets.” Selling was witnessed at higher levels as US futures and European markets started going down, he added.
Fahad Rauf, deputy research director at Ismail Iqbal, said, “The market took a breather from halts, in line with global markets, but could not sustain intraday gains.”
Furthermore, rupee depreciated against the greenback to 166, which raised concerns along with rising number of corona cases in Pakistan. Banks, power and fertilisers led the index, cumulatively adding 191 points, Rauf added.
The top gainers were Bata Pakistan, up Rs66.41 close at Rs1,474.99/share, and Wyeth Pakistan Limited, up Rs33.80 to finish at Rs600.00/share.
Rafhan Maize, down Rs150.00 to close at Rs6,350.00/share, and Pakistan Tobacco, down Rs51.94 to close at Rs1,649.06/share, were the main losers.
K-Electric Limited recorded the highest volumes with a turnover of 21.632 million shares. Its scrip lost Re0.03 to end at Rs2.75/share.
The lowest volumes were witnessed in Hub Power Company, recording a turnover of 4.346 million shares, whereas its scrip gained Rs1.13 to end at Rs81.33/share.
