Market watch: Stocks fall more than 100 points in volatile session

Refineries plummet on deemed duty rumours.

KARACHI: The stock market see-sawed in the first trading session of the week as the index climbed 132 points in the first half before closing the day down 103 points.

The Karachi Stock Exchange benchmark 100-share index ended 0.83 per cent lower at 12,359.36 points.

An unexpected decision of the State Bank of Pakistan leaving policy rate unchanged at 14 per cent provided the early positive impetus, said JS Global Capital analyst Ahmed Rauf.

However, foreign selling due to weak international markets following the Egypt crisis and lower-than-expected Lucky Cement results took their toll on the market, added Rauf.

Lucky Cement, the country’s largest cement-maker, net profit dropped 23 per cent to Rs1.46 billion in the first half (July to December) of fiscal 2011.

Refineries’ stocks closed at lower limits on rumours of a possible reduction in deemed duty to limit the increase in end-product prices. Deemed duty is collected by refineries on sale of petroleum products.

Among the refiners, Pakistan Refinery Limited and Attock Refinery Limited both hit the lower lock after falling five per cent.

Volumes, despite an increase, remained dull at 121 million shares compared with 87.9 million shares on Friday.

Heavyweight Oil and Gas Development Company and MCB Bank also saw heavy selling, which contributed 40 points to the total decline of 103 points.

Engro resisted the downward spiral and closed on a positive note on talk of foreign accumulation, said analysts.

Shares of 395 companies were traded on Monday. At the end of the day, 143 stocks closed higher, 237 declined and 15 remained unchanged. The value of shares traded during the day was Rs7.46 billion.

Lotte Pakistan was the volume leader with 11.47 million shares, falling Rs0.19 to finish at Rs15.34. It was followed by Nishat Chunian with eight million shares, gaining Rs0.59 to close at Rs24.14 and Pakistan Telecommunication Company Limited (PTCL) with 7.4 million shares, losing Rs0.6 to close at Rs18.59.



The turn of the year has been received well by the local bourse as average volume traded at the market hit a nine-month high at 170 million shares a day. Moreover, in terms of value the turnover in January 2011 was Rs8 billion a day, a level not seen over the last 12 months.

This is a tremendous improvement after the market saw volume plummeting to a 10-year low in 2010, according to Topline Securities.

The major triggers behind the improved performance were surge in foreign flows and anticipation of better corporate results. The benchmark KSE-100 index surged 2.8 per cent in January compared to the MSCI Emerging Markets Index which fell 2.1 per cent.

Published in The Express Tribune, February 1^st,  2011.