Low volume strength on opening faced renewed sell-off led by front line stocks, while prolonged stagnation and declining turnover soon spilled the trend towards mid-tier stocks, thus leaving the directionless market in an indecisive zone. Despite volumetric activity in group specific stocks the volume and value stayed at dead levels, however, the benchmark sustained to stay in brown zone (mix of green and red) due to low volume strength in Nestle and disallowed the wider market reflection on the benchmark.
KSE 100 index closed at 12484.17 with the loss of 11.86 points and total volume closed at 31,376,507 along with the total value of 1,182,545,406. KSE 30 index gained 8.40 points to close at 11594.89 and the All Share index closed at 8654.88 after losing 8.22 points. Total 113 scrips advanced, 95 declined and 94 remain unchanged out of total 302 scrips traded.
The latest developments of recent decline in the fuel prices along with the above target tax collection by FBR (that is expected to reduce some pressure from the ever rising inflationary and fiscal burden, thus making a case for relaxation in the local interest rates during the next review) initially failed to invite positive reaction at the local bourse. Yet dips continued to invite renewed buying in selected stocks, while pressure continued in high priced stocks (termed high priced due to low volumes) curtailing local strength and massive reduction in number of participants, mainly due to reservations regarding the implementation mode of CGT.
Since strength of a handful participants both from corporate and high net worth circuits has increased considerably due to reduction in market participants, the syndicated activity is likely to further reduce the confidence of the existing participants that are not part of the syndicate. Therefore it indicates the likelihood of snap rallies and extreme movements in various stocks, said Hasnain Asghar Ali at Aziz Fidahusein. And most high priced stocks trading at high multiples and illiquid stocks are likely to lead in the syndicated activity.
“Volatile law & order situation, high temperatures in political scene, deteriorating international relations, and tough economic and financial issues have indeed left less-options for the participants of the local equity markets,” he added.
