Stocks recoup losses

The Karachi share market showed some recovery Thursday on the back of what analysts said institutional interest in select stocks. Having contracted 15 percent since January 28, the KSE-100 index added 43 points to Wednesday's 32,539.61 points to close at 32,582.68 points. The index hit the session high and low of 32,715.79 and 32,443.72 points, respectively.
Foreign investors kept their selling spree alive offloading $2.47 million worth portfolios. The trading turnover dipped to 145.5 million shares from the previous 172.4 million. The market capitalisation remained almost flat at Rs 7.307 trillion. The traded value also landed in the negative zone to stand at Rs 8 billion compared to Rs 9.8 billion of last session. Of the total 362 scrips traded, 182 appreciated, 151 depreciated while 29 remained unchanged. Fauji Fertilizer Bin Qasim, losing 28 paisa, led the volume by counting 21.6 million of its listed shares changing hands. Other best performers were Pak Elektron, Jahangir Siddiqui Company, Engro Fertilizer, Maple Leaf Cement, TRG Pakistan, Pakistan International Bulk Terminal, K-Electric, Hum Network NBP that traded 14.6 million, 10.5 million, 6.6 million, 6.4 million, 5.4 million, 4.5 million, 3.7 million, 3.6 million and 3.3 million shares, respectively.
Futures trade declined to 22 million contracts from 28 million a day earlier. Ahsan Mehanti of Arif Habib Corp said the day's recovery was led by select oil and fertilizer scrips on institutional support in oversold market. Weak global commodities and fears on foreign selling impacted the sentiment, he added. The analyst cited support on rising sales data in auto, cement, oil and fertilizer sectors for Jul-Feb'15 as a catalyst for positive sentiment.
Analysts Muhammad Mobeen and Samar Iqbal observed volatility in the day's trading amid lacklustre volumes. "The market suffered from lack of triggers and consistent foreign selling," Mobeen said. Topline analyst Samar said despite favourable statement of the International Monetary Fund's Masood Ahmed Wednesday the equity investors remained cautious, following uncertainty on political and law and order fronts owing to MQM's protest. In oil and gas sector SHEL, down 4.4 percent, remained under pressure after the oil giant announced a loss of Rs 9.97 per share for the year ended 2014.
The fertilizer sector was bearish led by EFERT, minus 3.7 percent, due to hike in gas prices being implemented from April. Rumour of 20-25 percent increase in Gas Development Surcharge instead of 60 percent, as announced earlier, brought renewed interest in fertilizer stocks, especially FATIMA and FFBL while FFC also showed nominal gains.
LUCK is believed to be one of major beneficiaries of Karachi-Hyderabad Motorway work on which was inaugurated by the Prime Minister Wednesday. Contrary to investors' expectations, however, LUCK did not perform well due to fear of continuous foreign outflows in the stock. The market is expected to remain volatile, going forward.