Equities witnessed extreme volatility with USD240mn worth of shares changing hands closing +1.08%. Volumes were exceptional at 277mn shares with locals booking gains mainly in Oil stocks and talk of continued foreign buying. Mid day dip of over 4.2% from day high, dropped as a bombshell with retailers running for cover. Sustained support pushed the market back in green zone and closed firm above 8750. Reportedly, NIT State Enterprise Fund (support fund) was active today taking advantage of the current rally selling Oil stocks. OGDC remained in the limelight trading over 38mn shares (one year SMAVG Volume 11.9mn shs). Company confirmed Oil discovery in Nashpa Oil Field after close with an EPS PKR0.36 impact on FY10 earnings (notice attached). In line with our expectations, financials continued on yesterday's momentum with major stocks (NBP PA, MCB PA and UBL PA) closing at their respective upper checks (+5%). Cement stocks rebound today after manufacturers succeeded legal stay order against penalties imposed on charges of cartelization.
With foreigners taking keen interest in Oil and now seemingly Financials, one can expect market to test the all so important 9k level in the coming few days. Having said this, we continue to advise switching from Oil to Banking stocks and recommend trading positions in AICL PA, JSCL PA, LUCK PA and DGKC PA at current levels. Expect continued volatility.
Source: Closing Bell - Extreme Volatility at 8900 levels
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