Extremely choppy behaviour was witnessed on the share market on Wednesday as the equity prices moved both ways depicting substantial drop in the intra-day session on rumours of foreign selling but soon recovering on support from financial institutions.
The intra-day volatility was in the range of 477 points, exhibiting the jittery state of the investors. On the volumes counter, the turnover appreciated by 42 percent to 595 million.
'We can associate Wednesday's volatility to rumours regarding sell orders by foreign funds in heavyweights,' said Hettish Karmani, research analyst from Atlas Investment Bank. Cement sector, which underperformed in the rally, took the lead. DGKC remained the volume leader with turnover of 104 million shares. Lucky followed in its footsteps with volume of 30 million. PSO and PPL remained extremely volatile over the announcement of their pre-bid meetings.
NBP remained in foresight of investors as its result announcement is closing in, increasing up to Rs 339 and finally closing at Rs 331. Fertiliser sector, which depicted lacklustre performance after result announcement, was again in limelight as Engro, FFC and FFBL rose by Rs 9.20, Rs 3.10 and Rs 1.95, respectively.
Saima Naz, research analyst at WE Financial Services, said that initially the market rose substantially but after the rumour regarding foreign selling the index crashed to intra-day low of 11,130.96 points. E & P sector remained the key player during this downfall where PPL, POL and OGDC touched their lower limits. The market recovered in the later part of the day taking a reversal of 343 points.
On the whole, cement sector witnessed recovery. DGKC was among the major price gainers which surged by Rs 4.05 and was the largest volume contributor also. Fertiliser sector remained in the limelight after the announcement of 43 percent Y-o-Y urea demand by the NFDC. FFBL closed on its upper lock, while Engro and FFC gained Rs 9.2 and Rs 3.1, respectively.
Hasnain Asghar from Aziz Fidahuesin said that technically the extreme movements of the index and inability of the expensive energy stocks to find new buyers, when under pressure, might not allow the index to reinitiate an uninterrupted northward movement. Technically, the index would continue to face resistance around 11627-11637 while major support would come around 10096-11003. With two sessions to go for the week, the recommendation to wait for placement continues, while trading option can be exercised in the stocks having healthy fundamentals and inviting good volumes. Caution is, however, advised.
Abbas Raza, research analyst at First Capital Equities, said that higher levels saw jobbers, punters and various investors seeking market to book profits, which skewed the market south. But rumour regarding failure of February settlement by a few brokers created extreme panic.
However, upon news of smooth settlement of the February counter, savvy participants eagerly came into a wall-to-wall buying frenzy that aided Benchmark-100 to smartly recover amid handsome volume that placed the market 18 points in the up to close at 11474. KSE-100 under the impression of slight rumour came under an awesome spell of fright and extreme volatility, giving one an excellent insight of how fragile and brittle the bourse is on higher stages.
"Therefore, seeking of any fundamentally strong stocks should be done with extreme caution along with the prudence of profit and stop loss margin in mind."