KARACHI – The local bourse seemingly played a ‘tug of war” among local financial groups, as some supported bulls on likely availability of leverage and its positive impact on valuation of various main board stocks while others, including financial institutions, surfaced as major sellers thoroughly capitalising on the recent rise in political temperatures, in addition to anticipation of inflow through off-shore channels, likely repercussions of the cold diplomatic ties with US and the grim situation in Arab countries.
Furthermore, MQM’s announcement of it’s separation from the coalition party in Sindh impelled a loss to early gains. The KSE-100 index shed 25 points to close at 11,975 points, while total volume and total value stood at 94,318,566 and 5,284,504,520 respectively. The KSE-30 index lost 26.26 points and closed at 11690.41 levels, while the all share index closed at 8432.86 levels after losing 17.97 points. Volumes underwent a slender decline and were recorded at 117 million shares. Investors chose to book recent gains at higher levels, as the index bounced back nine percent.
MCB sustained the limelight amid rumours of foreign buying. The NBP rally turned bearish, propelling evidence of profit booking. Initial gains were under pressure due to massive sell-off in high priced stocks, which were already struggling to sustain the attained levels – mainly due to an absence of follow-up support. Moreover, decline in dividend yield and various mid-tier stocks, however, capitalised by the liquid participants offered some respite to the melting benchmark.
With the local groups clearly divided over the future trend of local equity market, volatility is likely to stay on the higher side, caution therefore stays the call, said Hasnain Asghar Ali at Aziz Fidahusein. He added that, with focus on dividend yielding stocks along with various low priced stocks for both trading and placement, short term technical calls for trading can be undertaken in front line stocks based on volumes.
Stop loss in high priced stocks will prove prudent, while a healthy response to the leverage product, mainly by financers, will provide stability to local equity valuations, he added.
