The share market on Monday, as expected, recorded gains following last week's massive downslide which badly battered the share prices. Recovery was recorded in almost all companies on expectations of healthy results to be announced this week.
Volatility continued as bulls and bears collided several times during two day.
The opening was negative but fresh interest in blue chip stocks pulled the market up into the green zone. Turnover increased to 240 million shares vis-à-vis last day's trading volume of 200 million Cement sector remained in the limelight on account of expected increase in demand in earthquake areas. Towards the end of the day, the KSE-100 Index closed on a very strong note and ended at 8408.62 level, up 118.81 points.
Overall, 174 companies were in the positive zone whereas 79 companies were in negative territory. PPL and NBP contributed 43.61 points to the KSE-100 index.
Hasnain Asghar from Aziz Fidahusein said that the nervousness linked to outstanding interest from October to November kept the index under pressure. The 67 points negative opening, however, did invite scattered buying. Presence of buyers on dips would allow the market to invite fresh funds.
The shift from October to November would however keep the market range-bound for a couple of sessions. Technically, the index would continue to face resistance around 8550-8557, while support stays at 8325-8333.
The upcoming results would invite fresh funds as the upcoming mutual funds and liquid institutions with permission to increase exposure in equity market indicate a healthy market in short to medium term. Low volume dip should, therefore, be capitalised.
Junaid Iqbal, research analyst from Jahangir Siddiqui Capital Markets, said that the market remained highly volatile and traded in a broad range between 8222 and 8420. Local institutions and investors remained active and accumulated cement, banking and oil and gas stocks on dip. Almost all cement stock companies like DG Khan, Lucky and Maple Leaf closed at their upper circuit levels. There were rumours in the market regarding an upcoming price increase by the manufacturers.
Muslim Commercial and National Bank of Pakistan also closed at their upper circuits while Bank of Punjab was not able to ride the short rally.
Pakistan Oilfields announced an EPS of Rs 10.96 for 1Q2006.
The bourse throughout the session was exceedingly volatile and with a wavering of 198 points, that swung the bourse in both columns, kept many participants, along with institutions, guessing as to where the trend lay due to which various among them preferred the sidelines and missed the rally which ensued as KSE 100 recovered remarkably well. The eagerness of contestants at lower levels brought about an enthusiastic purchase in MCB, NBP, PPL, DGKC, Lucky and PSO which were parked on there upper locks, giving weight and credibility to the recovery which everybody had waited for after a fall of 713 points, said an analyst from First Capital Equities in Karachi.
The index rebounded because of technical factors and the essential test of the bounce-back would be the sustaining of this uptrend, and it seemed highly unlikely for it to uphold the upward movement. Therefore, extreme caution should be used.
Volatility was very high, with the market struggling to set a definite course. A number of stocks closed limit-up or near their upper circuit levels. These included NBP, PPL, PSO, DG Khan Cement, Maple Leaf Cement, Lucky Cement and SNGPL. OGDC and BoP were the only two stocks that remained in the negative zone.
Trading in November futures contracts also commenced. The general observation was that mostly investors opted to square their positions, indicated by the decline in leverage in the October counter and extremely thin volumes in the November contracts.
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