Volatility in share prices dominated the proceedings at Karachi Stock Exchange (KSE) on Tuesday where investors exercised cautious approach ahead of vote of no-confidence and turbulence in Balochistan province.
The KSE-100 Index closed at 9,943 levels, up 67 points, against 9,876 levels of Monday. The volume in the ready market was 169 million shares, against 183 million shares a day earlier. The volume in futures market also decreased to 36 million shares from 40 million shares of Monday.
The market opened only 22 points up. Profit taking was witnessed in the first session as investors were cautious due to no-confidence motion and uncertainty about Pakistan Oilfields result. Following announcement of Pakistan Oilfields result, the market immediately recovered, with National Bank closing at Rs 222.50 (Rs 6.55 up), Pakistan Petroleum closing at Rs 235.40 (up by Rs 4.15), and OGDCL closing at Rs 125.75, ie higher by Rs 2.50.
The market remained volatile throughout the day due to the prevailing geo-political and worsening law and order situation in the country in addition to the voting session going on in the capital for no-trust movement against the Prime Minister. Investors seemed to refrain from getting into the market until these issues get settled, and some favourable results come out.
All these factors combined resulted in the choppy behaviour of the market. However, it managed to close 66.76 points above previous day's level as a few punters entered the ring at some attractive levels. With the announcement of POL earnings, the results' season has been wrapped up as almost all blue chips have announced there full year and quarterly results, which fell almost in line with expectations. NBP remained the star performer by leading the volumes and price gain, surging by Rs 6.55.
A leading analyst said that the law and order situation in the country, after the killing of Akbar Bugti, no-confidence move in National Assembly, and results expectation from POL remained major concerns for market players. Though the result of POL came in line with expectations, the scrip came under selling pressure after the results announcement, bringing down the entire market sentiment.
With the index dipping and no surprises expected from Islamabad, the institutions came and started buying in OGDC, NBP, PTCL and PPL. Trading volumes, though reporting a d-o-d fall, remained on the higher side as compared to average volumes in the recent times, as institutional investors were picking values at attractive levels. "We maintain our view that although valuations at current levels are extremely attractive, a cautious approach is advised as the market lacks positive triggers."
Hasnain Asghar from Aziz Fidahusein said that although the announcement of POL stayed below expectation on account of pay-out, it allowed market participants to freely trade in the stock as the suspense regarding announcement came to an end as the stock had already witnessed massive erosion in recent adjustment. The buying spree spilled to other sector stocks.
Technically, the index will continue to face resistance around 10037-10047, while mild support stays at 9790-9796. End to uncertainty regarding vote of no-confidence move, expected by the end of the day, might allow the market men to focus on company fundamentals and trade on technicals.
Ahsan Mehanti, chief executive officer, Shehzad Chamdia Co, said the market would see stability following the vote of confidence. Result season still in the limelight and arrival of D G Khan Cement and several other companies would push the index. The benchmark index closing above 9800 is the positive portent and would help increase the volume and share prices in the longer term.