KARACHI – The market closed down 39 points as index heavyweight OGDC suffered from massive profit taking dragging down other oil stocks with it. The KSE index closed at 12267.21 levels with the loss of 39.49 points while total volume stood at 90,451,627 along with the total value of 6,917,517,238.
OGDC slipped 2.2 percent, followed by marginal declines in PPL, while POL remained firm throughout the day and closed in the ‘green’ despite some profit taking towards the end of trading. FFC continued to attract major participation from local institutions and investors alike, gaining 2.3 percent, while shares in Engro closed marginally up, despite heavy profit taking by local institutions.
A total of 120 million shares exchanged hands against 135 million traded yesterday, with LOTPTA topping the list of volume leaders. Low volume price erosion in the high priced stocks forced the index in red zone but renewed buying in fertiliser sector stocks, in some cases due to high dividend yields improved the situation.
That allowed the benchmark to claw back, while market participants placed liquidity in various ‘safe’ stocks despite poor economic and financial readings. In terms of dividend yielding, various mid-tier stocks did spark across the board short covering, the activity did keep volatility on the higher side and it did allow the benchmark to enter the positive zone besides offering day trade opportunities to participants. Due to the absence of substantial buyers on dips however kept transactions restricted, confirmed views that the local bourse, due to absence of ready board leverage products, continue to be vulnerable to market volatility.
The likely chain reaction of an unprecedented rise in inflationary pressures that will come in the shape of escalating interest rates along with ballooning circular debt issue and power supply shortfall kept domestic investors under pressure.
The rising yields of the Pakistani bonds indicated a decline in the confidence of international participants in local economy, and further aggravation in mentioned variables have kept the threat of its negative fallout on the valuations at the local bourse on the higher side. The weakening local currency, although at slower pace, at the moment indicates a shift from equities to foreign currency, said Hasnain Asghar Ali at Aziz FidaHusein.
