KARACHI – KSE 100 index witnessed yet another day of correction with major oil, fertiliser and banking scrips receiving heavy punishment; as the bourse lost 81 points with volumes of 188 million shares as big local institutions opted to book profits ahead of a key monetary policy announcement on January 29.
The KSE 100 index closed at 12577.61 levels with the loss of 80.55 points while total volume stood at 163,708,207 along with the total value 8,499,145,764.
FFC and FFBL which remained in limelight during last week took a pounding at the hands of local institutions. FFC slipped 2.5 percent while FFBL lost 2.3 percent. Amongst energy companies, POL stole the show and remained in the ‘green’ on reports of encouraging production numbers. The oil sector came under fire with index heavy OGDC, PPL and PSO bearing the brunt while POL’s performance prevented the index from further loss. After tremendous price appreciation over the last few weeks, fertiliser scrips were threatened by profit booking.
It is believed that profit booking at current level seems justified as the majority of stocks are trading close to their nominal values or above it with few stocks have limited scope for further improvement said Bilal Asif at HMFS, adding that he believed the tug of war between the bull and bear will continue while we may see increase in volatility at local stock market.
The government’s efforts to chalk out an economic plan and positive numbers on trade balance did form a case for positive expectations, yet the investors are seemingly wary and are anticipating traders to dump their holdings on strength. With an update on leverage product missing, investors have scant reason to avoid correction and pressure on the bourse remains sustained.
Corporate influx in selective stocks on dips did provide consolidation, along with volumetric activity on LOTPTA, volume in the stock contributing more then 25 percent to the overall turnover provided trading opportunities to market men. Since various main board stocks have already attained saturation levels with only a handful stocks are trading at discounts, those duly resisted negativity across the board, stagnation led sell-off continued through out the session.
While the economy is increasingly facing rising raw material costs along with a decline in local and export sales, the companies carrying high and/or inefficient debt can lead to offloading, since the interest rate horizon is likely to make life difficult for companies in the grip of mentioned variables.
Along with anticipated earnings and payouts in the coming weeks, hopes are running high and keeping post results sell-off inflated. Various economic variables which to signal the likely rise in local interest rate will continue to maintain pressure on the bourse.
