Market watch: Market in red despite low inflation figures

Benchmark KSE-100 index falls 36 points.

KARACHI: The local bourse was unable to maintain upward momentum as investors opted to bank profits; pulling the market down to close in the red. Activity remained subdued at the exchange despite lower than expected inflation number for November.

The low inflation figures strengthened the fact that the State Bank of Pakistan will cut interest rates in the its next policy, a positive sign for the market mainly because a cut will make savings undesirable and investors will seek better gains playing in stocks.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index shed 0.22% or 35.88 points to end at 16,537.98 point level.

“The benchmark index, after beginning the day on a positive note, rallied up by the banking sector, was unable to sustain its intraday high and ended the day down,” said Shakir Padela, analyst at JS Global Capital.

Investors began cashing out their gains in the banking sector due to the lower than expected inflation numbers resulting in expectations of interest rate cut by the central bank in the upcoming monetary policy next week, Padela added.

However, Bank Alfalah remained in the limelight as investors believed that the company may announce better dividend this year also, said Samar Iqbal, equity dealer at Topline Securities.

The index-heavyweight oil and gas sector witnessed another day of lacklustre activity while cements traded in a narrow range with both Lucky Cement and DG Khan Cement ending the day flat.

Earlier, the Oil and Gas Regulatory Authority forwarded a summary to the petroleum ministry, suggesting an increase in gas tariff for the Sui Northern Gas Pipelines Limited (SNGPL), effective from January to July of next year. The news translated negatively on the utility company as investors anticipate reduction in profits for the company.

Trade volumes fell to 196 million shares compared with Friday’s tally of 312 million shares.

Shares of 411 companies were traded on Monday. At the end of the day 179 stocks closed higher, 178 declined while 54 remained unchanged. The value of shares traded during the day was Rs5.38 billion.

SNGPL was the volume leader with 16 million shares falling Rs0.03 to finish at Rs24.13. It was followed by Bank Alfalah with 14.64 million shares gaining Rs0.07 to close at Rs16.81 and Fauji Cement with 13.01 million shares losing Rs0.04 to close at Rs6.91.

Foreign institutional investors were net sellers of Rs153.77 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, December 4^th, 2012