KARACHI: The stock market managed to break the four-week losing spree in the outgoing week with the KSE-100 index showing recovery of 957 points (2.2 per cent) to settle at at 45,294.

The investor sentiments were dictated by the developments on the court hearings of Panamagate case. As the Supreme Court reserved the decision, investors kept speculating on the outcome.

Trading remained choppy throughout the week, though some domestic investors threw caution to the winds and stepped in to accumulate scrips with attractive valuations. The daily average volume shrank 23pc over the preceding week to 134 million shares while the traded value contracted 22pc to Rs7.5 billion.

Foreign investors offloaded stocks worth $2.01m against net outflow of $0.98m in the preceding week. Foreign selling was concentrated in oil marketing companies ($2.3m) and Power ($1.6m), while inflows of $2.5m were recorded in the cement sector. Among local participants, insurance companies were the largest domestic buyers for second week running with net purchases of $8.9m. Banks purchased shares worth $0.7m, while individuals sold $5.7m worth equity.

According to Arif Habib Limited, during the week oil and gas exploration companies added 269 points to the index amid slight recovery in oil prices mid-week. It was followed by commercial banks with gains of 201 points.

Oil and gas marketing companies rose 126 points; automobile assemblers were up 47 points while refineries added 37 points to the index. On the flip side, bearish pressure was seen in chemicals, which fell 7 points; food and personal care products down 3 points and textiles shedding 2 points.

According to Elixir Securities, the participants were driven by value hunting with OGDC, UBL and PPL adding the most to the index. The biggest loser of the week was Engro, down 229 points, as the company fell short of market expectations with respect to their board meeting.

In terms of percentage, Topline Securities calculated that the refineries were up 6pc, E&Ps 5.5pc, auto assemblers 4.6pc, OMCs 4.2pc, engineering 3.7pc, tobacco 2.8pc, pharma 2.2pc, cable and electric 1.9pc and banks 1.5pc performed in line with expectations. Chemical was down 0.5pc and power 0.7pc underperformed the index.

AKD Securities noted that the scrips leading the bourse during the week were: APL up 9.06pc, Hascol 7.39pc, OGDC 5.45pc, POL 5.02pc and CHCC 4.50pc, while laggards included: PIOC was down 3.80pc, MLCF 3.65pc, KEL 2.58pc, FFBL 1.50pc and Engro 1.21pc.

OUTLOOK: On Saturday, the Monetary policy committee decided to keep policy rates unchanged at 5.75pc for the next two months, which the AHL Research stated should be a non-event for the equity market and added that foreign flows coupled with news flows on domestic politics would continue to decide the mood of the market.

Next week also marks the futures rollover week, which could keep the market upside in check. Elixir Securities thought that much would hinge on the outcome of the Panamagate case. “Market is likely to remain volatile amid thin participation. We believe that trading activity will pick up once the final judgment is announced,” the brokerage said and cautioned that even the upcoming result season my take a back seat till the final judgment is announced”.

“We expect investors to adopt a cautious stance until the final judgment”, analysts at AKD Securities said. But they believe that the result season, commencing next week, is likely to guide market sentiments with scrips in key sectors (power, cements and autos) to remain in limelight on anticipated full year payouts.

Published in Dawn, July 23rd, 2017