Index recovers after tumultuous session

The capital market on Thursday recovered from the last session’s rout led by financials, cements, and exploration and production companies, though investors remained under pressure owing to continuous institutional selling and rising political temperature, dealers said.

Salman Ahmad, head of institutional sales at Aba Ali Habib said attractive valuations from recent fall-out triggered fresh buying in blue chips, trading and some of the investment stocks. “However, (the market) needs some big economic development to help sustain the recovery.”

Rising political temperature, redemption calls and elimination of several companies from eligible securities has also kept pressure on the market for the last couple of days, Ahmad added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.26 percent or 105.44 points to close at 40,676.92 points level, while volumes decreased to 371.732 million shares, as compared with the turnover of 473.730 million shares in the previous session.

KSE-30 shares index followed suit with a high of 0.31 percent or 53.29 points to end at 17,258.63 points level. Trading activity was recorded in 399 active scrips, of which 153 increased, 230 lost, and 16 remained unchanged.

Muhammed Saeed Khalid, head of research at Shajar Capital said the index remained down during the day, mainly on the prevailing uncertainty on the political front along with the approval of hike in gas prices by the Economic Coordination Committee (ECC).

“Despite allowing of concessionary gas to zero-rated sectors, the investors looked for the NCPI numbers for the month of September 2020. OMCs remained volatile during the day as government slashed diesel prices, while keeping petrol prices at the previous month levels,” Khalid added.

Sateesh Balani, director research at Ismail Iqbal Securities said fertilisers and chemicals remained under pressure as the ECC allowed a hike in gas prices.

Ittefaq and Indus steels’ shares were down 1.33 and 0.82 percent, respectively. “Ittefaq announced that girder mill will start operation soon, while Indus announced resumption of double shift operation to reduce waiting period,” he added.

Analyst Ahsan Mehanti from Arif Habib Corporation said stocks recovered on back of selected scrips across the board amid recovery in global equities, higher global crude oil prices and speculations ahead of quarter-end results.

Provisional data on cement sales showing 16 percent hike, higher Federal Board of Revenue (FBR) tax collection in July-September, easing fiscal deficit and rupee recovery amid upbeat data on $805 million current account surplus for July-August 2020 played a catalytic role in the positive close, he added.

AA Soomro, managing director KASB Securities said renewed interest was seen in cement and banks, while bets on non cyclical shares tumbled. There seems to be an apparent shift of wealth into new sectors as new data points and earnings season pours in, he explained.

The top gainers were Nestle Pakistan, gaining Rs100.00 to close at Rs6,700.00/share, and Sapphire Textile, up Rs67.49 to finish at Rs967.48/share, while Rafhan Maize, down Rs200.00 to close at Rs8,300.00/share, and Bhanero Textile, losing Rs67.64 to close at Rs834.23/share, were the main losers.

With 67.646 million shares, Hascol Petrol was on the top of the volumes chart. It declined Rs1.51 to end at Rs20.18/share, whereas Fauji Cement turnover with 8.682 million traded shares was at the bottom, and it gained Re0.21 to end at Rs20.09/share.