Market watch: Selling pressure continues amid lower participation

Investors cautious ahead of monetary policy announcement.

KARACHI: The stock market saw another session in the correction mode, as the market dipped amid shrinking investor participation and across-the-board profit-taking in overbought stocks.

“Volumes were dry as investors in the market chose to be cautious, waiting for the monetary policy to be announced on the December 14, 2012. Profit-taking was seen across the board, with fertiliser, cement and banking sectors taking the [greatest] hit,” reported JS Global analyst Fahad Ali.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index dropped 0.51% or 85.85 points to end at the 16,701.69 points level. Trade volumes plummeted to 127 million shares, compared with Monday’s tally of 189 million shares. The value of shares traded during the day was Rs3.48 billion.

“The broader market continued to see thin volumes and selective interest; however, the Oil and Gas Development Company generated relatively better volumes, closing flat on reported local institutional buying,” reported Jawwad Aboobakar, analyst at Elixir Securities. “Engro Corp (-3.02%) remained under pressure due to uncertainty over gas allocation [to its fertiliser manufacturing concerns] as rumours indicated that a key economic committee meeting had ended inconclusively. Contrary to the market’s direction, Engro Foods (+1.33%) remained in the limelight and closed positive on talks of accumulation by foreign funds, as well as rumours of the acquisition of some stake in the company by a Middle Eastern group.”

“Moreover, the transport strike is hurting the entire industrial chain, which led to cement and textile stocks getting hammered,” he added.

Shares of 396 companies were traded on Tuesday. Jahangir Siddiqui & Company was the volume leader with 13.89 million shares losing Rs0.57 to finish at Rs17.26. It was followed by Maple Leaf Cement with 8.56 million shares losing Rs0.12 to close at Rs13.79 and Sui Northern Gas Pipelines with 7.79 million shares losing Rs0.84 to close at Rs23.41.

Foreign institutional investors offloaded Rs775.05 million ($8.16 million) worth of securities.

Published in The Express Tribune, December 12^th, 2012.