Market watch: Stock market lacklustre ahead of Eid holidays

The Pakistan Stock Exchange (PSX) ended the last trading session before Eidul Azha holidays in the green on Monday as the benchmark KSE-100 index rose nearly 40 points despite a lack of positive triggers.

However, trading remained lacklustre as investors avoided taking fresh positions ahead of three-day-long holidays amid rising coronavirus cases in the fourth wave in Pakistan.

The KSE-100 index sustained the upward momentum and remained positive for the fifth successive session.

As trading began, the index surpassed the 48,000-point mark in the first few hours, but the lack of positive news flow erased the gains and the market traded on a flat note after midday.

Later, the bullish momentum built up again, but weak investor sentiment eroded the gains for the second time and the index ended the day marginally higher.

At close, the benchmark KSE-100 index recorded an increase of 38.93 points, or 0.08%, to settle at 47,873.26.

Arif Habib Limited, in its report, stated that the market traded in a narrow range, oscillating between -83 points and +172 points.

“Being a short trading week, investors were reluctant to go long and preferred to close intra-day positions regardless of the pertinent stock prices,” the report said.

As Pakistani rupee slipped against the US dollar, with open market exchange rate falling to Rs162, investors opted for textile, chemical, exploration and production stocks as against cement, fertiliser and banking sectors.

The report added that among oil and gas marketing companies, Sui Northern Gas Pipelines and Sui Southern Gas Company hit their upper circuits on the back of court’s decision in favour of gas utilities to maintain the unaccounted-for-gas (UFG) benchmark.

Technology stocks saw consistent upward movement in Avanceon, which hit its upper circuit and Systems Limited, which ticked up and maintained such levels till the end.

Sectors contributing to the performance included miscellaneous (+33 points), oil and gas marketing companies (+29 points), auto (+10 points), cement (-24 points) and technology (-14 points).

Individually, stocks that contributed positively to the index included Pakistan Services (+33 points), Sui Northern Gas Pipelines (+25 points), Meezan Bank (+12 points), Fauji Fertiliser (+11 points) and Sui Southern Gas Company (+8 points).

Stocks that contributed negatively were Lucky Cement (-22 points), TRG Pakistan (-21 points), Engro Corporation (-12 points), HBL (-10 points) and Bank Alfalah (-8 points).

JS Global analyst Muhammad Mubashir said that the KSE-100 index attempted to cross the psychological resistance of 48,000 points, but investors chose to book profit on the higher side on the back of increase in Covid cases in the country.

The market eventually closed flat at 47,873. Volumes remained dull at 321 million shares where Byco Petroleum (+1.2%), Sui Northern Gas Pipelines (+7.5%), Al Shaheer Corporation (-1.3%), Treet Corp (+1%) and WorldCall Telecom (+2.6%) contributed a cumulative 25% to the aggregate volume.

“We believe post-Eid performance is largely dependent on the upcoming result season, regional geopolitics and the fourth wave of Covid,” added Mubashir.

“Going forward, we recommend investors to avail any downside as an opportunity to buy in cement, bank, exploration and production sectors,” the analyst said.

Overall trading volumes dropped to 321 million shares compared with Friday’s tally of 348.6 million. The value of shares traded during the day was Rs11.9 billion.

Shares of 416 companies were traded. At the end of the day, 226 stocks closed higher, 174 declined and 16 remained unchanged.

Byco Petroleum was the volume leader with 24.3 million shares, gaining Rs0.13 to close at Rs10.77. It was followed by Dandot Cement (R) with 23.2 million shares, gaining Rs0.45 to close at Rs0.73 and Sui Northern Gas Pipelines with 18.5 million shares, gaining Rs3.67 to close at Rs52.72.

Foreign institutional investors were net sellers of Rs1.3 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.