KARACHI: Though political disputes have cooled down after the MQM’s meeting with the president, the JUI-F’s preference to move away from the ruling coalition and profit-taking by local institutional investors allowed the index to maintain itself beyond the 11,800 level but unable to breach the 11,900 level.
As expected, foreign investment fell to minimal level during Christmas holidays. The KSE 100 index closed at 11825.06 after losing 18.59 points, while the KSE 30 index gained 5.41 points after closing at 11393. 54. The all share index closed at 8269.87 with the loss of 14.17 points. Investors played safe, unwilling to commit heavy investments. The stance of investors can be readily gauged by market volume which was stubbornly low in contrast to the current month’s average volume. Total volume stood at 93,851,277 and total value stood at 4,826,288,861. 154 scrips advanced, 230 declined and 23 remain unchanged out of a total number of 407 scrips.
Major oil stocks, with the exception of PPL which gained 0.9 percent, underwent mild pruning. POL and PSO edged lower by 0.3 percent. Among banks; BAFL and NBP remained key attractions as a result of local institutional buying, and gained 2.8 percent and 1.2 percent, respectively. Moreover, NML scrips remained highly sought after as international cotton prices rose to $1.75/pound from $1.55/pound in the last two weeks, jumping 2.2 percent with healthy volumes of nearly 7 million shares.
High quantum activity, mainly in banking stocks did lead to a positive opening for the benchmark; local corporate participants executed placements at almost the highest range of the day. Specific stock from oil and gas sector witnessed similar activity around midday, as high quantum activity invited follow-up activity by the market. However after execution of the deals, the momentum could not be maintained and stocks lost value, quickly.
Textile sector stocks performed well, however due to a sell-off in index heavy weights and various main board stocks and capitalisation of swapping opportunities prevented the momentum from being maintained. Stock and sector switching mainly in textile, fertiliser and chemical sectors along with offloading in banking and oil and gas exploration scrips also keep the benchmark under pressure.
Nonetheless, comparatively low volume contribution by holding companies prevented sustained decline. Stocks offering consistent yields, despite the bleak economic and financial outlook were prized by buyers, but dips on intra-day basis provided opportunities for stocks which are subject to speculative volatility.
Snap rallies initiated through large quantum activity through off-shore accounts, along with speculative activity by financial groups and holding companies, will maintain the activity levels at the bourse.
