KSE undergoes small pruning

The share prices remained range-bound as a volley of selling orders before the close reduced the overall tally and the index finished with small pruning. The KSE-100 index fell 1.70 points, 0.03 percent, to 5465.36 as compared with 5467.06. The volume rose to 258 million shares as against 215 million shares of Tuesday.
Bulls stretched further as the telecommunication giant got a warm welcome in the T=3 settlement, having a decent weight in the index. The index soon breached major resistance of 5477-5483 to make an intra-day high of 5502. Offloading in the main stocks, however, did not allow the index to consolidate above 5500. The punters shifted from index base to fertiliser, banking and cement stocks. The move, however, led to an intra-day adjustment and the index closed with a small adjustment.
Technically, however, constant inability of the index to register a closing above 5483 is hampering a smooth surge. Therefore, immediate resistance continues to stay around 5503-5510 while support will come around 5425-5433, said Hasnain Asghar of Aziz Fidahusein.
It is, therefore, recommended to take advantage of low volume movements as the index is likely to consolidate in between the levels while healthy fundamentals suggest buy on dips. High yield speculative stocks should be the main focus while right issue in the cement stocks can invite offloading by weak holders, thereby indicating availability of leading stocks of the sector at discounted rates.
Azhar Javaid from WE Securities said that the market failed to sustain the 5500 level due to profit-taking. The expectations of Engro results rejuvenated the interest in the scrip but it faced selling pressure once the results were announced due to less-than-expected payouts. All in all, the market remained range-bound but some rallies can be expected in the coming days due to upcoming board meetings of some major scrips.
Aadil Ehtesham from Multiline Securities said that the buying interest, conversely, was not sufficient to provide much resilience to the market. Before the end of the session the market entered defensive zone where high priced stocks became the target of profit-taking. OGDC, PPL, ICI, Nishat Mills, Bank of Punjab, Sui Northern Gas, MCB, Askari, Hubco and Pakistan Oilfields led the decline.
"We are of the opinion that the market would consolidate around prevailing levels, with one or two dips greeting the market as buying opportunity," he said.
The badla increased by 400 million rupees. There was badla increase in PTCL as it returned to the badla market after its ex-dividend period. The badla rates skyrocketed to over 14 percent as badla financing was dearer and the borrowers had to borrow at high rates.. Analysts recommend caution in the market.
Fauji Fertiliser Bin Qasim rose 55 paisa to Rs 21.25 on a volume of 30.664 million shares; PTCL rose 25 paisa to Rs 40.60 on business of 30.617 million shares; D G Khan Cement moved up to Rs 52.10 from Rs 51.35 on turnover of 27.140 million shares; OGDC closed at Rs 66.15, lower by 70 paisa, on deals of 26.366 million shares; and Engro posted a gain of 40 paisa to Rs 99.60 on trading of 15.451 million shares.