Market watch: Bourse opens week on a turbulent note

Benchmark KSE-100 index falls 73 points.

KARACHI:

The Karachi stock market opened the week on a turbulent note, closing 73 points in the red at the 23,600-point level after hitting an intraday low of 23,439.81 points amid caution at current levels. Likely increase in gas prices was the motivator for investors to sell index heavy energy and fertiliser stocks. Healthy earnings announcements, on the other hand, helped the bourse recoup some of the losses.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.31% or 73.07 points to end at 23,600.23 point level. Trade volumes improved marginally to 156 million shares, compared with Friday’s tally of 152 million shares.



The market started off the week on a negative note with fertiliser companies Fauji Fertilizer and Engro Corporation being the biggest contributors to the downfall, said Ovais Ahsan, analyst at JS Global Capital. The (fertiliser) sector continues to be besieged by negative news flows as the government mulls on removing subsidy in the form of cheaper feed stock price and replacing it with a direct subsidy to farmers, Ahsan added.

The highly-leveraged cement sector also weakened with DG Khan Cement leading the fall as fears of a downturn in demand in the wake of recent widespread monsoon floods and a possible hike in interest rates when the State Bank announces its monetary policy this week kept sentiments mixed. Even the banking sector was not spared as mixed sentiments were seen ahead because analysts remain certain on what the central bank will eventually decide.



Institutional buying towards the end helped the index pull back from a deeper close as Pakistan State Oil came in for some pre-result interest, while Hub Power Company edged up in a post-result rally after beating market estimates with the announcement.

Shares of 348 companies were traded on Monday. At the end of the day 115 stocks closed higher, 204 declined while 29 remained unchanged. The value of shares traded during the day was Rs8.58 billion.

Kot Addu Power Company was the volume leader with 10.91 million shares losing Rs1.26 to finish at Rs58.46. It was followed by National Bank of Pakistan with 10.87 million shares gaining Rs0.23 to close at Rs58.29 and Hub Power Company with 9.83 million shares gaining Rs2.29 to close at Rs71.61.

Foreign institutional investors were buyers of Rs641 million and sellers of Rs342 million, according to data maintained by the National Clearing Company of Pakistan.

Published in The Express Tribune, August 20^th, 2013.

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