Market watch: Bourse falls on lack of investor interest

Economic uncertainty, absence of triggers result in negative close.

KARACHI:

Bearish activity was witnessed in the first trading session of the week on Monday, as limited local and foreign interest in shares across the board resulted in a dull day at the Karachi bourse.

The Karachi Stock Exchange (KSE) 100-share index fell 0.08 per cent or 9.4 points to end at 11,674.83 points.

Concerns over rising inflation, a growing fiscal deficit and higher global commodity prices affected investor sentiment despite expectations of record corporate earnings in the January-March quarter, said Arif Habib Investments Director Ahsan Mehanti.

Additionally, uncertainty over the release of next tranche of the International Monetary Fund’s $11.3 billion support package for Pakistan dampened investor confidence, added Mehanti.

Equities remained weak throughout the session as the market desperately sought triggers that could provide impetus. Talks of selling by foreign investors in index heavyweight Oil and Gas Development Company (OGDCL) kept investors on the sidelines as they feared further selling, said Elixir Securities analyst Nazim Abdul Muttalib.

Engro Corporation closed one per cent lower after the company issued a notice, announcing closure of its new plant due to suspension of gas supply, which led to fears of lower earnings.

Furthermore, the refinery sector was in the limelight on expectations of better quarterly results due to higher gross refinery margins, added Muttalib.

Trade volumes dropped to 47.27 million shares compared with Friday’s tally of 56.84 million shares. Lower volumes are expected to continue as the announcement of next year’s budget comes closer.

Shares of 351 companies were traded on Monday. At the end of the day, 148 stocks closed higher, 120 declined and 83 remained unchanged. The value of shares traded during the day was Rs2.17 billion.

Jahangir Siddiqui and Company was the volume leader with 3.68 million shares, gaining Rs0.33 to close at Rs7.08. It was followed by Azgard Nine with 3.31 million shares, gaining Rs0.26 to close at Rs7.04 and Arif Habib Corporation with 2.66 million shares, gaining Rs0.03 to close at Rs23.52.

Published in The Express Tribune, April 19^th,  2011.