After booking gains of over 125 points yesterday, the index became a victim of short term profit booking and levels were marginally down at the close of today’s session. Improved volumes along with the start of results season provided investors with stimulus to invest in the market. The KSE 100 index closed at 12,433.17 levels with the loss of 10.37 points and total volume stood at 66,580,330 along with the total value of 3,656,590,051.
Fertiliser stocks were the most actively traded, largely on account of hefty news flow towards the sector. Urea price hike by Engro benefited Fauji group which once again turned out to be the jewel of the sector. FFC also witnessed some correction after hefty price appreciation yesterday while Engro remained lackluster. OGDC supported the benchmark along with its partner PPL from further index erosion, while POL dented the overall contribution by PPL & OGDC. FABL’s post merger result was fairly good, but unable to attract ample investor interest.
Early hiccups and technical adjustment in various main board stocks led to a mixed opening, while corporate influx on dips in high yielding stocks, mainly from the fertiliser sector, neutralised the negative impact due to sell-off in singled out stocks from E&P sector. Targeted and syndicated support along with high quantum change of hands on strength in cement sector despite increase in input cost and decline in local and export sales did pour in decent turnover. This also provided the day traders short term trading opportunity, thus keeping snap rallies alive through out the session.
A total 22 points support extended by OGDC restricted the benchmark from reflecting the wider sentiment, wherein panic was quite evident. Earning euphoria that is likely to continue for a while mainly due to propagation and despite the fact that except for singled out stocks, wider front liners and mid-tier stocks are unlikely to report earnings as per expectations.
Complicated working environment and decline in local strength and squeeze in volume, on the other hand will continue to disallow the front line stocks to sustain historic payouts. Hasnain Asghar Ali at Aziz Fidahusein said “being selective and calculative is recommended both for trading and placement, while speculative activity and syndicated movement may offer short term trading opportunities”
