KARACHI
The KSE 100 index closed 46 points down, despite the precedent set by positive corporate results and decent trading volumes in the previous trading sessions.
A short break was expected before continued progression towards the 11,000 mark, given the KSE-100’s unabated expansion of 2.3 percent during the last four trading sessions. The index touched its peak level of 10,748 in the opening hours of the trading session, but selling pressure subdued the impetus of buying and the index to close at 10,658 points.
The KSE 100 index closed at 10658.15 with the loss of 45.56 points, while the KSE 30 index closed at 10239.39 after losing 58.15 points. The all share index closed at 7486.31 with the loss of 30.92 points. Investors seem inclined to cash in at this level and this mood was observed across the board; only 61 percent scrips closing the positive territory. The oil and gas sector was a poor performer, with only NRL saving face with a three percent gain.
The same fate befell most bellwether scrips. The banking sector too, was exposed to heightened selling pressure, with only UBL gaining a massive 3.9 percent. However, question still remains, whether a mere 46 points or 0.43 percent correction is enough for renewed upward. NML announced earnings of Rs.3.84 per share in the first quarter of the year, which was higher than market expectations.
But the scrip closed sluggishly with volumes of 8.2 million shares. OGDC announced 1QFY11 earnings of Rs 3.89 per share along with a first interim cash dividend of Rs.1.50 per share beating market expectations, but ended the day without gaining significantly.
Among banks, MCB announced earnings of Rs.16.44 per share (Rs.5.99 per share for 3Q) which also exceeded market expectations, but the scrip closed down 0.7 percent as investors booked profits. LOTPTA remained the market leader in terms of volumes after it announced good earnings of Rs.2.10 per share but despite garnering some profit closed 2.6 percent down.
Nevertheless, the textile sector stocks continued to register decent turnover and gain, mainly on back of higher earnings expectations ( likely to reflect the depreciation of the rupee) and support of local financial groups, while strategic sell-off in ANL allowed the stock to lead the run-up in terms of turnover.
Unclear stance of domestic banking on the implementation of Supreme Court’s directives and a swapping strategy in banking stocks from leading large caps to comparatively lower tier stocks also lead to pressure on the main board stocks of the sector.
Hasnain Asghar Ali, a market analyst, said the concerns expressed by IMF, on the effect of rising inflation and threat of the impending rise in oil prices on the local economy.
