Local bourse trailed regional peers in today’s session as trading commenced amidst wary sentiments after the prolonged Eid holidays. As Italy replaced Greece at the center of European debt crisis, fear of a split in the euro-zone kept global equities under pressure. Investor participation remained dismal with 49 million shares traded during the day as the benchmark index could not sustain 12K level amidst profit taking.
Since local fundamentals remain mostly impervious to the latest development in euro-zone, the reaction at the local bourse appears transitory. Positive news flows especially in energy sector indicating speedy resolution of circular debt depict possible re-rating in the sector thus positively influencing the overall index’s performance in the intermediate term.
The KSE 100 index closed at 11969.05 levels with the gain of 11.75 points, while KSE 30 index gained 7.81 points to close at 11300.38 levels. All Share index closed at 8281.27 levels after gaining 7.10 points. Total 96 scrips advanced 108 declined and 110 remain unchanged out of total 314 scrips traded.
The local bourse, on syndicated efforts energised by positive developments, restructuring of maturing T-bills and meeting of Pak-India leadership, successfully resisted otherwise an extensive decline, mainly on the fierce meltdown in international and regional equities and commodities. The index failed to sustain the initial low volume high of 12000, supported by OGDC and MCB. The stocks contributed almost 40 points to the benchmark 100, for it too managed an unchanged status on closing besides keeping the benchmark in brown zone during the closing hour.
Issuance of bonds and T-bills to offset interest receivables of the local banks did inspire the accumulators to adopt an aggressive stance, as the step will create space for financing to the OMCs and IPPs, although the plan to settle circular debt by securing loans from international lenders seems far fetched. Since LOC from IMF stays a major pre requisite, the financial transaction executed will provide some breathing space to the mentioned beneficiaries, thus keeping the interest in banking stocks alive. Cued up sellers on strength following the old saying “act on rumors and react on news” however, disallowed the sector stocks as well as various high priced stocks from staging a rally, thus leading to a weaker market. This was reflected by low volumes despite news flash suggesting improved relations with India.
The propagation did inspire snap rallies in frontline cement and textile stocks, absence of follow-up however disallowed aggressive display despite corporate participation, thus forcing the strength to defuse after change of hands on strength. Therefore, stagnation invited low volume price erosion during the closing hour. Fauji group stocks from the fertiliser sector undoubtedly led the market during early hours inviting renewed buying after staying under correction phase for quite a few sessions. The junior partner lost steam quite early while range bound activity and lack of interest disallowed the elder brother FFC to find consolidation on strength.
“The stock however managed to stay in green zone, while Engro on fears of gas supply and high debt portfolio witnessed off-loading from various quarters, thus keeping the stock under pressure. Covering purchases however did allow the stock to resist bottom lock and managed to trade around lower trajectory for most part of the session, while fears of low volume price erosion mainly due to shallowness kept the likely entrants in search of panic sell, caution was therefore quite evident,” said Hasnain Asghar Ali at Aziz Fida Husein.
