KARACHI

After a sharp fall of 697 points or 2.1 per cent in the last two days in the stock market, some support was witnessed on Wednesday. As a result, the benchmark KSE 100-index, after touching a low of 32,199 points, recovered and closed at 32,540 points – almost flat versus Tuesday’s closing.

Though there were some concerns due to protest of Muttahida Quami Movement (MQM) in the city but later on institutional buying was seen as many stocks have reached at attractive levels, commented Samar Iqbal VP at Topline Securities. Volumes remained better with 172m shares (worth Rs9.8b/ $98m) traded as compared to 132m shares (Rs7.6b/$76m).

Oil stocks remained under pressure due to falling international crude oil prices while Lucky Cement (LUCK) recovered 1.1%. Other cement stocks also posted decent gains. Investors also accumulated Engro Corporation (ENGRO) shares realizing that gas price hike will only affect one plant of its subsidiary Engro Fertilizer (EFERT). Going forward, local political situation in the city along with foreign investors flows will be a key trigger for the market, the analyst observed. Stocks closed lower amid pressure in oil, fertilizer and banking stocks on weak earnings outlook.

Rising trade deficit data for July-Feb’15 to $14.1b, expected raise in gas tariff next month and falling global commodities impacting oil, textile and cement sectors played a catalyst role in bearish activity post major earnings announcements at KSE, ignoring impact of record remittances data for July-Feb’15 to $11.7b and expectation for IMF 7th tranche receipt this month likely to strengthen rupee, stated analyst Ahsan Mehanti.

Market witnessed a volatile trading session as the KSE-100 dipped by 368 points to 32,199 points earlier during the day, before recovering to close at 32,540 points, said analyst Arhum Ghous at JS Global. The recovery was led by leveraged cement sector stocks in anticipation of discount rate cut in upcoming monetary policy. The key highlights were: MLCF, FCCL and DGKC closed 1.8%, 1.3% and 1.3% higher, respectively. In fertilizer sector, upcoming news of gas tariff hike kept major scripts in bearish momentum as FFBL, FFC and EFERT ended 3.5%, 1.0% and 0.3% lower respectively.

 Mixed sentiment remained in the banking sector as an expected discount rate cut would affect banking returns.