Stocks turn in positive performance

Published May 8, 2019
Traders believe that the International Monetary Fu­nd would propose further policy tightening. — APP/File
Traders believe that the International Monetary Fu­nd would propose further policy tightening. — APP/File

KARACHI: Stocks managed to break the five-day losing streak as the KSE-100 index recovered marginal 25.64 points (0.07 per cent) and close at 35,631.06. Although the index opened positive and made up to intraday high of 200 points, much of the gains were underpinned by upside in banking stocks.

Traders believed that the International Monetary Fu­nd would propose further policy tightening, which shored up the price of banking stocks. Additionally, the sector was supported by State Bank’s auction calendar which targets borrowings of up to Rs4.7 trillion from private banks in May-July.

The index remained highly volatile during the first session of Ramazan and witnessed low volume due to shortened trading hours and lack of investor interest. Uncertainty loomed large on the outcome of IMF talks; the upcoming budget; Financial Action Task Force decision and later the MSCI review.

Analysts at Topline stated: “Investors are waiting for key economic developments in the coming months where an agreement with IMF can provide short-term relief to index. Further, this programme will be a road map in bringing fiscal discipline in economy.”

Day traders and short-term investors liquidated their positions before the close of market which wiped out most of the intraday gains. Among participants, foreign investors were net buyers of shares worth $3.5m, while mutual funds went along with their sell-off, possibly to meet the redemptions.

The volume declined 8pc over the previous day to 65.4m shares while traded value fell by 13pc to Rs2.74bn. Stocks that contributed significantly included K-Electric, Bank of Punjab, Sui Northern Gas, Maple Leaf Cement and Hub Power, which formed 37pc of total turnover.

Scrip-wise, major contribution to the index upside came from Habib Bank, higher by 4.55pc, Unite Bank 3.66pc, MCB 1.75pc, Nestle Pakistan 3.11pc and National Bank 3.50pc, adding 205 points. On the flip side, Lucky Cement, down 2.06pc, Searle Company 5pc and Hub Power 1.08pc scrapped 53 points.

Published in Dawn, May 8th, 2019

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