KARACHI – The KSE-100 index fell sharply by 173 points, recovering almost 90 points from intraday low. E and P and fertiliser stocks helped slight recovery towards the end as 91 million shares were traded.
The KSE 100 index closed at 11849.46 points, while the total volume stood at 73,741,529. The dubious political front triggered a negative start to the bourse. Almost all major oil, banking and fertiliser stocks bore the brunt of the selling pressure and sentiments ebbed, as reports of major political meetings between the government and the opposition parties to keep the current setup intact, made rounds.
Market capitilisation contracted by 1.44 percent amidst political unrest. Jittery investor sentiments were evident with dreary volumes of a mere 91 million shares were traded, as savvy local investors preferred to stay on the sideline. Banking sector was at the forefront of profit taking as NBP, UBL and HBL pulled the index down.
Bellwether oil and gas sector stocks, albeit negative, helped arresting the downspin owing to positive outlook on commodities in 2011. Rise in the rate of national savings took the gloss of equities as alternative investment avenue with lower risk profile offered attractive yield. Though recovery is equities is expected in 2011, commodities driven sectors are likely to steal the limelight.
A massive decline in certain fundamentally strong stocks did invite cautious accumulation, since the sellers were visible even on sustainability. The buyers stayed on the back foot and awaited the float to disperse on some trigger. Similarly, massive decline on opening amid low volumes clearly caused panic sell-off, while absence of buyers on intervals added to the pressure.
This caused massive low volume price erosion, wherein stocks were on sale at market rate. Development over the week-end regarding introduction of leverage product indicates an unprecedented delay in the introduction of product due to legislative issues, as assurance by the President and the interpretation of law by the minister suggests routing of the approval through CCI, thus making the process lengthy.
The issue certainly added to grievances of the local equity market that continues to suffer due to lack of market depth and stays at the mercy of handful participants, those operate through off-shore and local accounts. Continuation of conservative stance by the authorities of passing the impact of rising international oil prices to the local economy, instead of taking a strong stance of reducing pressure on fiscal front by various tough decisions, will clearly add inflationary pressure.
LSE drops nearly 100 points
LAHORE – The changing political scenario adversely impacted on the Lahore Stock Exchange (LSE), which remained bearish. The LSE lost 98.02 points to close at 3,634.99 against its opening at 3,733.01 levels. Only six scrips gained, 60 went down and 48 closed without any change in their opening values.
The volume of the market remained 4.86 million shares, which was 0.73 million shares less than Friday’s turnover of 5.6 million shares. The majority of the investors were inclined towards selling, which pushed the market to red zone. Lotte Pakistan PTA was the volume leader with a turnover of 1.22 million shares while it lost Rs 0.32 to close at Rs 13.38 against its opening at Rs 13.70.
National Bank of Pakistan (NBP) was the second volume leader with 0.61 million shares turnover and it also lost Rs 2.84 to close at Rs 73.98 against its opening at Rs 76.82. SME Leasing was the major gainer and with one shares turnover it added Rs 1.0 to close at Rs 14.45 against its opening at Rs 13.45.
The Millat Tractors was the major loser and with one share turnover it lost Rs 6.78 to close at Rs 493 against its opening at Rs 499.78. Staff Report
