Index makes modest gains

Late buying on dips supported the KSE-100 index on Monday to close in positive at 11,404.17 points with a modest gain of 29.08 points after a massive onslaught of over 300 points in early hours. "Local investors and corporate participants took fresh positions on dips in the selective stocks in fertiliser, banking and oil sector stocks that supported the index to recover its intra-day losses and close in positive", investors said.
Foreign investors, however, emerged net sellers and withdrew $1.38 million from the equity market. The market opened on a strong negative note due to investors'' concerns over downgraded US rating and its effect on global economy and the index hit 11,071.50 points intra-day low, down 303.59 points. However, the market witnessed healthy recovery on the back of local investors'' interest on dips and the index recovered its intra-day losses and closed in positive with modest gains. Trading remained low and the volume at ready counter amounted to 106.740 million shares as compared to 113.170 million shares of last Friday.
Market capitalisation increased by Rs 8 billion to Rs 3.015 trillion. Of 324 active scrips, 133 closed in positive and 128 in negative, while the values of 63 stocks remained unchanged. PTCL was volume leader with 7.309 million shares and after moving both sides closed at the previous day''s closing level of Rs 10.57. Lotte Pakistan PTA inched up by Re 0.04 to close at Rs 10.73 with 7.146 million shares.
NBP lost Re 0.45 to close at Rs 46.31 with 6.978 million shares. Azgard Nine closed at previous closing level of Rs 4.58 with 6.315 million shares. Nishat Mills declined by Re 0.98 to close at Rs 40.10 with 5.639 million shares. Jahangir Siddiqui Co gained Re 0.23 to close at Rs 5.74 with 4.581 million shares. Fauji Fertiliser Bin Qasim and Engro Corp increased by Re 0.94 and Re 0.79 to close at Rs 46.08 and Rs 130.09 with 3.532 million shares and 2.980 million shares respectively. Arif Habib Corp lost Re 0.03 to close at Rs 23.98 with 3.272 million shares. Nishat (Chunian) declined by Re 0.96 to close at Rs 15.72 with 3.093 million shares.
Unilever Pak and Nestle Pakistan were highest gainers, increasing by Rs 282.96 and Rs 29.38 to close at Rs 5942.35 and Rs 3997.14 respectively, while Siemens Pak and Indus Dyeing were worst losers declining by Rs 25.21 and Rs 17.02 to close at Rs 911.00 and Rs 323.44 respectively.
Hasnain Asghar Ali at Aziz Fidahusein Co said that the massive onslaught on opening forced the index into deep red led by frontline stocks. Early decline did invite renewed buying by the corporate, mainly the government treasuries and resident participants. Short-covering, that came in as a follow-up, allowed the index to undergo technical recovery.
He said that increase in discounts, availability at low multiples of the dividend-yielding stocks away from various threats can be looked for accumulation, while steep fall in oil prices may offer some relief to the inflationary pressures if passed on to the economy and not adjusted against PDL. The lower monthly average will lead to decline in refinery margins. Profitability of oil and gas exploration stocks and inventory losses to already cash-starved OMC were badly hit by lingering and ballooning circular debt. Caution, therefore, stays the call.