KSE closes in red zone, loses 61.32 pts


KARACHI – Activity at the local bourse remained subdued and the benchmark index closed in red zone. PPL’s healthy growth in the first half of the Financial Year 2011 could not force an upward momentum, as majority of the bellwether scrips in oil and gas sector exhibited profit taking.
The KSE-100 index closed at 12370.59 points following a loss of 61.32 points. The total volume stood at 94,741,196, while the total value was 4,709,009,357.
The monetary policy announcement on January 29, 2011 is likely to set tone of the local bourse. In addition, investors are also eyeing implementation of the MTS and a possible resolution of issues between members of KSE and SECP.
OGDCL and FFC supported the index, averting a further fall; however banking sector stocks mimicked index’s downward trend. Low turnover and stagnation forced retail and corporate corridors to offer market rates, as various instances of low volume price erosion were seen. A rising trend in interest rate, gloomy economic and financial horizon, in addition to an instable political situation kept the market cautious.
The ongoing plan for economic reforms, if executed, has the potential to become a likely trigger for the local bourse. However, surging commodity prices might not allow reforms to yield the desired results.
Technical recovery may spur stock and sector swapping, wherein stocks keeping up with the market expectation of substantial cash payout can be looked for accumulation. Stocks, trading at high multiples, faced with high and inefficient debts can be off-loaded, said Hasnain Asghar Ali at Aziz Fidahusein. He added that support of respective groups and holding companies may trigger speculative activity.