Market watch: Stock market stumbles on depressing inflation news

Benchmark KSE-100 index falls 126 points.

KARACHI: The Karachi stock market ended lower on the last day of the week, reversing gains earlier in the day on news of higher inflation.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.56% or 126.76 points to end at 22,649.09 point level.

“Pakistan equities started the last trading day of the week with sentiments upbeat, keeping up with yesterday’s momentum on news of talks starting between the government and the Taliban along with the bounce back in flows setting the mood,” said Fareesa Baig of Elixir Securities.



“However, CPI inflation numbers announced at 9.08% during the mid-day break dented investor confidence and saw the index plummeting down -1.57% to close at current levels. Late selling in index names to the likes of Oil and Gas Development Company (OGDC PA -2%), MCB Bank (MCB PA -1.5%) saw earlier gains wiped out, while most financials managed to close on strength,” Baig added.

“CPI came in higher than expected by industry analysts, which triggered selling spree in the market, where index heavyweights plunged with the KSE-100 index making a low of 22,603 points,” said Fahad Ali of JS Global.

“High CPI indicates that there may be a hike in Discount Rates in the upcoming Monetary Policy to be announced later this month. Pakistan State Oil also remained in the limelight as rumours of increasing the oil marketing company’s margins are under discussion,” Ali added.

Trade volumes rose to 125 million shares compared with Thursday’s tally of 119 million shares.

Shares of 297 companies were traded on Friday. At the end of the day 130 stocks closed higher, 143 declined while 24 remained unchanged. The value of shares traded during the day was Rs7.2 billion.



Jahangir Siddiqui and Company was the volume leader with 11.8 million shares gaining Rs0.39 to finish at Rs7.85. It was followed by Pakistan Telecommunication Limited with 8.3 million shares
gaining Rs0.11 to close at Rs26.78 and Arif Habib Corporation with 7.3 million shares gaining Rs0.32 to close at Rs20.75.

Foreign institutional investors were net buyers of Rs473 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, November 2^nd, 2013.

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