KARACHI – The local bourse lost its early positive spurt to close 103 points down at 12,359 level. The SBP unexpectedly maintaining the interest rates at 14 percent and provided the initial positive impetus with the market climbing 132 points, but fear of foreign selling due to weak international markets following the Egyptian crisis and the below par result of Lucky Cement soon took a toll on the market.
The KSE-100 index closed at a level of 12,359.36 with the loss of 103.34 points while total volume stood at 95,797,182 along with the total value of 7,060,768,597. Refineries closed at lower limits, as rumors of the deemed duty possibly being slashed to limit the increase in end product prices surfaced. Traded volume remained lackluster at 121 million shares with LOTPTA topping with 11.5 million shares traded.
However news of a cut down on duty for local refineries in order to keep the product prices unchanged triggered downward pressure across the board. It is believed that the market might continue to remain volatile amidst delays on the implementation of structural economic reforms alongside the implementation of MTS, said Salman Vidhani, Senior Investment Analyst at Habib Metropolitan Financial Services Ltd. (HMFS).
Oil and gas exploration stocks led the show along with fertiliser stocks, while some buyers encouraged by hefty payouts while other invited speculative activity to support initiated by the respective group accompanied by various mid-tier stocks. This allowed the benchmark to register intra-day gains to the tune of 1.22 percent mainly on the back of technical recovery.
Low volumes however continued to restrict day traders and market punters as they seemingly traded with clipped strength, while expensive stocks continued to encourage sell-off on the part of institutional participants. Renewed speculative and high quantum activity by local holding companies and offshore participants did keep triple digit gains intact for most part of the session, midday stagnation and absence of follow up support however forced the index to lose substantial gains due to massive price erosion.
Hasnain Asghar Ali, a market analyst, stated that although optimism in the local arena continues to tempt short term traders, stagnation and low volumes has kept the sellers cautious. He also stated that ready board leverage will remain the single most dominating factor for the local equity market.
