The turbulence in today’s trading session was comparable to that of a plane ride in a hail storm as the opening session saw the market skydive 301 points before recovering to gain 74 points at one point and finally settle for a 29 point gain for the day. The morning session freefall was the ripple effect of the global market reaction to the S&P downgrade of the US economy as the Asian markets all closed in the red zone today. However, the local bulls were not going to let the KSE-100 become just another victim of the US downgrade and rallied in the afternoon session to drag the index over the positive mark.
The KSE 100 index closed at 11404.17 levels with the gain of 29.08 points, while KSE 30 index secured 45.82 points to close at 10815.22 levels. All Share index closed at 7912.63 levels after gaining 21.11 points. Total 132 scrips advanced 127 declined and 68 remain unchanged out of total 327 scrips traded.
Notable index titan OGDC, which at one point had a floor cap, managed to climb out of its predicament and finish only 2.4 per cent lower from its previous close. While we can take today’s session as a positive, this was just a battle and the war is far from over from a global perspective, hence a few more turbulent sessions should not surprise the prudent investor. Hasnain Asghar Ali at Aziz Fidahusein said that since the internal economic and financial matters continue to stay unresolved the technical recovery is unlikely to find sustainability, caution therefore stays the call.
Increase in discounts (availability at low multiples) of the dividend yielding stocks away from various threats can be looked for accumulation, while steep fall in oil prices may offer some relief to the inflationary pressures if passed on to the economy and not adjusted against Petroleum Development Levy. The lower monthly average will lead to decline in refinery margins, adding concerns to the profitability of Oil and Gas exploration stocks whose inventory losses were badly hit by lingering and ballooning circular debt. The stocks trading at high multiples based on curtailed local strength can be looked for off-loading by the corporate participants, while punters may even opt for short selling to stay hedged against long positions in some.
