Market bullish despite rains

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Yesterday’s low volume gains in the rain-hit-session invited hefty profit taking on opening today thus pushing the benchmark in red zone during early trade with technical short covering in various speculative stocks. Strength in Nestle did pull the index from red zone, and trading activity from there on the front liners attracted market men mainly for short term bets.
The KSE 100 index closed at 11297.02 levels with gain of 32.59 points, while KSE 30 index secured 55.81 points to close at 10851.28 levels. All Share index closed at 7848.79 levels after gaining 19.35 points. Total 112 scrips advanced 123 declined and 104 remain unchanged out of total 339 scrips traded. Absence of follow-up support disallowed the momentum to continue, while selective activity did allow the benchmark to stay positive, wherein the circular debt hit and cash-strapped PSO managed to test its maximum limit during intra-day trade. Fertilizer sector stocks mainly those belonging to Fauji group on consistent earnings growth and dividend stream attracted local liquidity along with closed end funds trading with dividend toppings yielding at least 15 percent p.a., which kept the market men busy in hunting good bargain deals.
Likely repercussions, mainly financial and agricultural implications, are yet to be assessed of the floods in Sindh, and economic/financial woes with uncertainty in regional and international equity markets is expected to keep upside confined.
“CGT hit local bourse suffering on account of squeezed volumes led by the front line and high priced stocks to continue the search for sustainable multiples, which is likely to be found somewhere in lower region, caution therefore stays the call,” said Hasnain Asghar Ali at Aziz Fidahusein.
“Since only handful sector and stocks are likely to escape various economic and financial woes, selective accumulation for both short and long-term placement can be looked for on dips, low volume strength in high priced stocks may however continue to offer hedging opportunities,” he added.