KARACHI – The Karachi Stock Exchange (KSE) sustained profit taking, as investors turned bearish on the pretext of advance Capital Gains Tax (CGT) filing for the period of July-December 2010. Investors appeared fearful of wealth sources investigation by the tax authorities.
The KSE-100 index dwindled 165.74 points to close at 12411.87 points, while the volume stood at 160,142,195. Moreover, the KSE-30 index squeezed 210 points to close at 12115.84 points, while the all share index suffered from a loss of 111.93 points. Market capitalisation of the KSE-100 index shrunk 1.32 percent as investor participation dampened, while concentration in third tier stocks was observed.
Profit taking by savvy investors, following hefty gains during the last few sessions, may facilitate further advancements in the post result season. Furthermore, expectation of the monetary policy announcement during the next week, especially chances of a further rise in policy rate, may spoil an upbeat investor sentiment.
Among the scrips, LOTPTA declined following news of a lower than expected cash payout, in addition to thin margins in the first quarter of 2011. FII’s were rumored buyers of fertiliser scrips, whereas locals were sellers of refineries and energy scrips. Out of 395 scrips, 104 advanced, 271 declined, while 20 remained stagnant. Absence of buyers, in most of the main board stocks, kept the panic going throughout the session. Although larger decline in various main board stocks was not reflected in the benchmark, low volume price erosion forced substantial declines in stock values.
Corporate support, in specific stocks, restricted losses in the benchmark to 1.7 percent, while technical recovery did provide volumetric trading opportunities, mainly in stocks undergoing massive decline during intraday trade.
Comparatively safer stocks, offering consistent dividend yields along with improved earnings, can be looked for short term trades, said Hasnain Asghar Ali at Aziz Fidahusein.
