Market watch: Correction in global markets pulls down KSE index

Positive news for telecom sector not enough to sustain rally.

KARACHI: The stock market took a break from its results-fuelled bull-run, amid a generally downward trend in global markets, closing lower in a session dominated by activity in the telecom sector.

“The Karachi Stock Exchange took a breather as the overbought momentum led the market into the negative zone,” said JS Global analyst Ovais Ahsan.

“Correction in global stock markets compelled investors to trim their positions as the index approached the key level of 18,000 points,” Topline Securities’ equity dealer Samar Iqbal said. “A favorable court decision regarding international call rates triggered a rally in telecom stocks like Pakistan Telecommunication Company, TeleCard and WorldCall … Profit taking was seen in cement and oil stocks,” she added.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.15% or 26.05 points to end at the 17,921.02 points level. Trade volumes shot to 350 million shares, compared with Wednesday’s tally of 267 million shares. The value of shares traded during the day was Rs8.60 billion.

“Approaching the psychological level of 18,000 points, the benchmark index traded in a narrow band all day and closed in the negative territory as investors preferred booking gains,” observed Elixir Securities’ Jawwad Aboobakar.

“Pakistan State Oil traded nearly 6 million shares as the company announced a surprise 20% stock dividend and a Rs2.5 per share cash dividend,” he added.

Shares of 375 companies were traded on Thursday. At the end of the day, 155 stocks closed higher, 171 declined while 49 remained unchanged.

“Exploration giant Oil and Gas Development Company (down 1%) led the laggards, as below-consensus earnings kept the stock under pressure,” said Ahsan.

WorldCall Telecom was the volume leader with 55.15 million shares, gaining Rs0.59 to finish at Rs3.70. It was followed by Pakistan Telecommunication Company with 42.29 million shares, gaining Rs1.08 to close at Rs22.83; and Jahangir Siddiqui and Company with 32.58 million shares gaining Rs0.58 to close at Rs18.88.

Foreign institutional investors were buyers of Rs514.37 million and sellers of Rs122.03 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, February 22^nd, 2013.

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