The stock market witnessed an intense mid-week selling spree, as investors abandoned positions in the midst of thin trade. According to dealers and analysts, the market turned bearish on the back of dented sentiments following the Economic Coordination Committee’s (ECC) failure to deliberate the issuance of Term Finance Certificates to ease the power sector circular debt, and global trends in stock and commodity prices.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index slid 1.63% or 232.60 points to end at the 14,081.07 point level.
“Investors trimmed their positions as they fear more foreign selling if the bearish trend continues in regional markets,” remarked Samar Iqbal, equity dealer at Topline Securities.
Trade volumes declined to 146 million shares compared with Tuesday’s tally of 153 million shares. The value of shares traded during the day was Rs5.13 billion.
“Fall in local urea and cement prices, and concerns over proposals for the banking sector in the federal budget due next month affected market sentiments despite expectations for improvement of Pakistan-US relations after decisions on the resumption of NATO supplies,” informed Ahsan Mehanti, director at Arif Habib Corp.
“PSO came down by 3.5% [following news of the ECC’s failure]. The cement sector also came under heavy battering over news of reduction in cement prices by Rs15-20 per bag: DG Khan Cement (DGKC) closed down 4.5%, while Lucky Cement was down 2.9%. Fall in Engro Foods’ stock prices led to correction in Engro as well,” reported Mujtaba Barakzai, analyst at JS Global.
DGKC was the volume leader with 15.98 million shares losing Rs1.95 to finish at Rs41.20. It was followed by Engro Foods with 14.80 million shares losing Rs3.09 to close at Rs60.58 and Pakistan Telecommunication Company with 14.67 million shares losing Rs0.86 to close at Rs16.12.
Foreign institutional investors were net sellers of Rs150.74 million, according to data maintained by the National Clearing Company of Pakistan Limited.
Published in The Express Tribune, May 17th, 2012.
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