Market watch: Bourse falls on heavy selling in active session

Foreign investors sell Rs534.5m worth of stock.

KARACHI: Equities turned up the selling frenzy on Wednesday to such an extent that trading activity reached a 30-week high.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index dropped 2.28 per cent or 271.73 points to end at 11,640.46 point level.

Morning trade soon turned negative as news reports of current account deficit widening by 102% in the first quarter of fiscal 2012 along with government borrowing increasing by 20% pushed investors to offload, said Elixir Securities equity dealer Nazim Abdul Muttalib.

Outflow of $60 million in Hubco deal also affected investor sentiment, according to market experts.

Foreign institutional investors were net sellers of Rs534.5 million worth of shares, according to data maintained by the National Clearing Company of Pakistan Limited.

Meanwhile, all the selling increased activity at the bourse and took trade volumes to 30-week high of 112 million shares compared with Tuesday’s tally of 81.1 million shares.

Healthy activity was also witnessed in the fertiliser sector after Sindh High Court directed Sui Northern Gas Pipelines to supply guaranteed quantity of 100 million cubic feet per day to Engro plant. Four of the top five trade stocks during the day were from the fertiliser sector.

Fauji Fertilizer Company closed at its lower limit of the day after investors booked gains as most think that the stock price has reached its peak, said Muttalib. The stock managed to post a whopping 157% return since last October.

Fatima Fertilizer Company was the volume leader with 16.77 million shares declining Rs0.16 to finish at Rs24.22. It was followed by Engro Corporation with 13.73 million shares plummeting Rs2.44 to close at Rs129.94 and Pakistan Telecommunication Company Limited with 7.26 million shares losing Rs0.74 to close at Rs10.78.

Shares of 335 companies were traded on Wednesday. At the end of the day 84 stocks closed higher, 173 declined while 78 remained unchanged. The value of shares traded during the day was Rs7.12 billion.

Published in The Express Tribune, October 20^th, 2011.