KARACHI – The KSE 100 index tumbled by 62 points as profit taking by local institutional investors rose ahead of the year end close, while political uncertainty also played out, with a major coalition partner of the government in Sindh deciding to part ways with the federal cabinet and choosing to sit on the treasury benches.
The KSE 100 index closed at 11848.05 with the loss of 61.68 points, while total volume standing at 73,567,358 along with total value at 4,661,166,772.
Engro bore the brunt of the selling trend, dipping 3.5 percent over rumours that the trial run for the new plant has not begun on schedule and that the government is seeking an explanation for the unexpected 23 percent hike in the price of urea from fertiliser manufacturers.
Oil stocks were under pressure albeit with low volumes, while shares in banking stocks also closed in the negative. Bowing to the technical calls, the benchmark opened on a negative note, renewed buying interest in Fauji stocks from the fertiliser sector (despite being technically overbought), and NBP along with activity in various textile sector stocks offered short term activity, while on the other hand giving the portfolios an opportunity for sector swapping.
Stocks carrying high debt burden with indications of the continued rising trend in local interest rates, mainly due pressures on main variables like inflation and government borrowings, along with the listed companies facing offloading on part of both the corporate and retail participants.
Despite news reports of increasing non-performing loans in the banking sector will definitely hurt upcoming earnings along with various technical issues on taxation front; the market participants did manage a positive run in the main board stocks of the sector.
The absence of follow-up and off-loading by cautious investors prevented any maintenance of the run-up in the front line stocks of the sector. The syndicate once again exhibited its time tested strategy of a low volume surge in index heavy weights and high priced stocks in order to allow the benchmark to maintain the numbers, and march forward, thus restricting the losses on the benchmark.
The gloomy economic financial and political outlook will continue to pressure the local equity markets, and the influx by local holding companies, financial groups listed at the local bourse, activity by high net worth clients, and activity through off-shore accounts are expected to continue to present short term trading opportunities.
