Anti-corruption probe keeps stocks lacklustre

An ongoing anti-corruption investigation against the officials of a leading brokerage house on an alleged manipulation of prices kept the benchmark index in the negative zone on Tuesday, dealers said.

The KSE 100-share index declined 25.66 points, or 0.08 percent, to close at 32,983.47 points. The index lost 512.23 points during the trading to have reached the intraday low of 32,514.28 points in the morning. At a point of trading, the index went above a pre-opening level by 17.38 points to have touched an intraday high at 33,026.51 points.

KSE 30-share index fell 53.76 points, or 0.28 percent, to close at 19,380.10 points.

Volumes surged 29 percent to 142.38 million shares as compared to 109.61 million shares a day ago. Trading value improved to Rs8.61 billion from Rs6.28 billion earlier. The market capitalisation was up by Rs2 billion to Rs6.98 trillion.

Out of a total of 326 active stocks, 171 closed with decrease in their prices, 126 ended with increase and 29 finished with no change.

The decline in the index was led by energy blue-chips, including Oil and Gas Development Company, Pakistan State Oil and Pakistan Petroleum Limited. 

The stocks faced extended selling despite a recovery in the international crude oil prices due to ongoing geopolitical tension between Saudi Arabia and Iran.

However, analyst Ahmed Saeed Khan at JS Global Research said the cement sector led the recovery as decreasing coal prices, increasing local dispatches and profitability kept the investor interest intact in the sector." 

Top gainers of the sector were DG Khan Cement up 1.03 percent and Maple Leaf Cement rising 1.36 percent. 

Pak Suzuki Motor Company rallied 2.39 percent on the back of recent price hikes by the car maker. The automobile sector closed the day in the black.

"Moving forward we expect the market to remain volatile and recommend buying in dips with the cement sector looking attractive on favourable sector dynamics and upbeat demand," Khan said.

Analyst Muhammad Rizwan at Topline Securities said the increase in car prices between Rs5,000 and Rs15,000 by Pak Suzuki and an expectation of better sale renewed interest of investors in the auto sector.

"Upcoming projects under the China Pakistan Economic Corridor and expectation of better than anticipated cement sales growth kept the sector in the limelight," Rizwan said.

Mid-tier stocks continued to invite volumetric buying after announcing results.  Pak Elektron was volume leader with 17.442 million shares, as it closed at Rs68.32 with a gain of Rs1.90/share. This was followed by TRG Pakistan with 10.55 million shares. The stock value ended at Rs34.59 with a loss of 64 paisa/share. Maple Leaf Cement recorded trade in 8.22 million shares, as it finished at Rs80.46 with a surge of Rs1.08/share.