Market watch: Bearish trend continues as index falls 112 points

Standoff between Pakistan and US keeps investors sidelined.

KARACHI: Bearish trend continued on the stock market on Thursday as investors remained glued to the sidelines owing to escalating tensions with the US.

The Karachi Stock Exchange benchmark 100-share index ended 0.91 per cent or 111.81 points lower at 12,187.47.

Pakistan is working hard to defuse tensions over the fate of Raymond Davis, a US official arrested over killing of two men in Lahore on January 27, in a case that threatens billions of dollars in US aid.

Oil stocks were particularly under pressure on lower oil production numbers in the latest weekly update, said Elixir Securities equity dealer Sara Shahid. Pakistan Oilfields fell 1.4 per cent, Pakistan Petroleum Limited dropped 1.5 per cent and index-heavyweight Oil and Gas Development Company decreased Rs1.35 to close at Rs169.78.

The market is expected to remain range-bound till implementation of the margin trading system which is expected by the end of February, added Shahid.

The number of shares traded during the day rose to 89.82 million shares from Wednesday’s tally of 72.27 million.

MCB Bank closed down 3.5 per cent despite announcing 2010 earnings that were in line with market expectations. It declared earnings per share of Rs22.2 along with a cash payout of Rs3 per share and 10 per cent stock dividend. The stock fell Rs7.7 to close at Rs214.88.

However, stock-specific excitement may be seen as Nishat Power Limited and Allied Bank are scheduled to announce their earnings today (Friday), added Shahid.

Lotte Pakistan PTA was the volume leader with 7.77 million shares, losing Rs0.07 to finish at Rs16.18. It was followed by Sui Southern Gas Company with 5.97 million shares, gaining Rs0.27 to close at Rs26.47 and Nishat Chunian Limited with 5.85 million shares, losing Rs0.25 to close at Rs25.28.

Foreigners were said to be buying energy stocks while locals were seen active in close-end mutual funds as Meezan Asset Management decided to convert its close-end fund Al-Meezan Mutual Fund into open-end fund. Al-Meezan Mutual Fund was fourth in the volumes chart with 4.09 million shares changing hands.

Shares of 396 companies were traded on Thursday. At the end of the day, 142 stocks closed higher, 237 declined and 17 remained unchanged. The value of shares traded during the day was Rs2.86 billion.

Published in The Express Tribune, February 11^th, 2011.