KSE-100 makes marginal gains as global energy uncertainty weighs on early rally

KARACHI: The Pakistan Stock Exchange’s benchmark KSE-100 index ended Tuesday with only a modest rise, as an early surge faded under pressure from profit-taking and renewed caution over global energy markets.

The index opened strongly and climbed 2,442.72 points to an intraday high of 178,370.45 at 10:09am, reflecting an upbeat start to the session. But the rally lost momentum as trading progressed, with the market slipping sharply from around midday and falling below the 177,000 mark by 1:56pm. By the close, the KSE-100 stood at 176,133.56, up just 205.83 points, or 0.12%, from the previous session.

Topline Securities Ltd said the day’s “strong start proved short-lived” as investors moved to lock in gains at higher levels, triggering broad-based selling in the second half of the session. The brokerage said the muted finish reflected investor caution amid lingering geopolitical tensions and uncertainty in global energy markets, which kept traders selective despite the early optimism.

Refinery stocks came under particular pressure, with Topline pointing to market speculation that the long-awaited refinery policy could face further delays. The firm said investor sentiment remained guarded as participants assessed geopolitical developments and their possible effects on oil prices, inflation and foreign investment flows.

The session was shaped in part by developments in the Middle East. Early gains were supported as markets weighed reports of mediation efforts between the US and Iran against fresh exchanges of attacks between the two sides. At one point, global oil prices were down more than 1% by 1:15pm PKT, helping sentiment across the local market.

That tone changed later in the day as oil prices recovered on continued hostilities in the Gulf and threats from Yemen’s Houthis of a naval blockade of Saudi Arabia. Brent crude futures rose $1.62, or 1.8%, to $90.84 a barrel by 4:52pm PKT. The front-month US West Texas Intermediate crude contract, which expires on Tuesday, gained $1.37, or 1.7%, to $84.60, while the more active September contract increased $1.48, or 1.8%, to $83.96.

Awais Ashraf, director of research at AKD Securities, said the market extended Monday’s late recovery as oil prices eased from a one-month high amid renewed mediation efforts between the US and Iran. He added that investor sentiment was also being supported by optimism around the ongoing earnings season, with oil and gas exploration, cement, refinery and textile companies expected to post stronger-than-usual results.

Monday’s session had also been volatile, with the benchmark opening the week in a weak position before late value-hunting helped it finish in positive territory, though with only a slight gain.

This report is based on a monitored public feed and includes material attributed to Topline Securities Ltd, AKD Securities and Reuters. Source: Dawn Home - https://www.dawn.com/news/2017214/kse-100-makes-marginal-gains-as-global-energy-uncertainty-weighs-on-early-rally