KARACHI: The stock market experienced range-bound trading on Monday as retail-driven speculative small-caps led the bourse in a lacklustre session where trading volumes dropped to around 106 million shares.
The State Bank’s monetary policy announcement over the weekend did not have a major impact on stocks since it kept the borrowing rate unchanged at 5.75%.
However, political uncertainty due to possible disqualification of Prime Minister Nawaz Sharif in the Panama Papers case kept institutional investors wary of investing in major index names.
At close, the benchmark KSE 100-share Index recorded a rise of 234.81 points or 0.52% to finish at 45,529.20.
Elixir Securities, in its report, stated Pakistan equities inched up with the benchmark KSE-100 index settling above 45,500 despite a dull trading session.
Stocks opened positive and witnessed range-bound trading as the day progressed with the wider market trading in a narrow band of 300 points.
“Uncertainty in domestic politics was much to blame as it contributed to the lacklustre session with very selective institutional participation as most locals refrained from participating aggressively amid looming verdict of the Panama case,” it said.
Index names generated little interest while retail-driven speculative small-caps led volumes. Moreover, in line with expectations, weekend monetary policy announcement, when the State Bank of Pakistan maintained the benchmark borrowing rate at 5.75%, had no impact on the market.
“(We) Expect institutional flows to mainly guide market direction going forward while prevailing anxiety over domestic politics will keep activity in the wider market in check,” the report added.
JS Global analyst Maaz Mulla said the KSE-100 traded between an intra-day low of -23 points and an intra-day high of +272 points to close at 45,529, an increase of 235 points.
“Oil and Gas Development Company (OGDC, +0.33%) and Pakistan State Oil (+1.24%) gained as their bonds matured and announcements of bright investment prospects were made,” he said.
“Exploration and production sector stocks including OGDC, Pakistan Oilfields (+0.85%) and Pakistan Petroleum (+0.52%) closed in the green zone as oil prices increased globally after an OPEC committee meeting.”
International Industries (+3.80%), International Steels (+1.55%) and Amreli Steels (+2.03%) from the steel sector gained to close in the green zone.
The rollover week has limited the upside on certain stocks and participation is expected to remain low. However, the result season is likely to boost volumes in key sectors such as power, cement and auto.
“Investors are recommended to remain cautious until final judgment in the Panama case is announced,” he added.
Overall, trading volumes fell to 106 million shares compared with Friday’s tally of 122 million.
Shares of 335 companies were traded. At the end of the day, 213 stocks closed higher, 106 declined while 16 remained unchanged. The value of shares traded during the day was Rs5.3 billion.
TRG Pakistan was the volume leader with 22.7 million shares, gaining Rs1.28 to close at Rs39.91. It was followed by Azgard Nine with 7.29 million shares, gaining Rs1 to close at Rs12.97 and The Bank of Punjab with 5.9 million shares, gaining Rs0.35 to close at Rs11.54.
Foreign institutional investors were net sellers of Rs67.16 million during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.