Market Watch: Stocks undergo correction amid lower participation

Lower volumes confined to specific stocks.

KARACHI:

The market opened the week with institutional selling in mid-cap stocks, which led it to close in the red. Interest remained confined to specific stocks, as the market remains cautious ahead of the State Bank of Pakistan’s monetary policy announcement.

“Stocks closed bearish on institutional profit-taking in overbought stocks. Trade remained in a narrow range amid profit-taking in stocks across the board,” said Ahsan Mehanti, analyst at Arif Habib Corp.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index shed 0.12% or 20.37 points to end at the 16,787.54 points level. Trade volumes plummeted to 189 million shares compared with Friday’s tally of 313 million shares. The value of shares traded during the day was Rs4.06 billion.

Shares of 378 companies were traded on Monday. At the end of the day 140 stocks closed higher, 197 declined while 41 remained unchanged.

“Major profit booking was seen in the banking sector, with National Bank closing the day down by 2.5% on anticipation of another rate cut in the upcoming monetary policy,” reported JS Global analyst Shakir Padela.



“MCB traded against the market direction to close up on institutional buying ahead of the year close,” added Faisal Bilwani, analyst at Elixir Securities. “After a strong close on Friday, Lotte PTA corrected on profit-taking with most activity driven by retail investors. Weekend news of increase in production from the key Makori field pushed exploration and production scrips, primarily Pakistan Oilfields, up; however, the stock closed little changed on reported selling by state funds.”

“The cement sector consolidated with low volumes, as investors chose to remain sidelined ahead of the monetary policy,” said Padela.

Maple Leaf Cement was the volume leader with 28.41 million shares gaining Rs0.48 to finish at Rs13.91. It was followed by Lotte Pakistan PTA with 16.89 million shares losing Rs0.25 to close at Rs7.94 and Fauji Cement with 12.59 million shares losing Rs0.15 to close at Rs6.58.

Foreign institutional investors were buyers of Rs239.39 million and sellers of Rs132.69 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, December 11^th, 2012.