Market watch: Dull start to the week as stocks go into correction mode

Benchmark KSE-100 index loses 332 points.

KARACHI: The first trading day of the week started on a dull note and soon succumbed to an overdue corrective momentum.

At close, the Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 1.23% or 332.29 points to end at 26,670.60.

“The index saw a correction of around 1.6% mid-day, fuelled by troubles in the regional markets,” said Fareesa Baig of Elixir Securities.

“With the earnings excitement failing to keep investors hooked, there was an overall selling mode across the board as investors chose to trim positions in the wake of uncertainty,” she said.



“Most cement and oil names participated in the decline, Lucky Cement (LUCK PA -4.2%), Oil and Gas Development Company (OGDC PA -1.6%) and Engro Corporation (ENGRO PA -3.1%) were among the top losers, dragging the index down and denting the overall market sentiments on reported foreigner selling.

Fauji Fertilizer Bin Qasim (FFBL PA -2.1%) announced 2013 earnings at Rs6.01/shares, up 29% year-on-year along with a cash payout of Rs2.25/share, failing to meet expectations.

“One can expect equities to trade volatile as locals track regional markets and look forward for guidance from foreign flows while we see limited downside in select names over upcoming earning announcements that will keep investor interest alive,” she said.

The market corrected 1.2% in line with a broad sell-off in global markets with fear of foreign selling resonating all around.

Meanwhile, Ovais Ahsan of JS Global Capital said that caution and fear were the sentiment of the day as the government upped the ante by implementing a more aggressive counter terrorism plan.

“Engro Corporation 3.1% continued to lose ground as euphoria over the its fertiliser unit getting gas at concessionary rates from the Mari network remained a pipedream with neither the company nor relevant authorities confirming the news which sparked a rally in the conglomerate last week,” he said.

Trade volumes fell to 230 million shares compared with Friday’s tally of 239 million.



The value of shares traded during the day was Rs8.3 billion.

Media Times Limited was the volume leader with 18 million shares, gaining Rs0.57 to finish at Rs3.74. It was followed by K-Electric with 14.3 million shares, gaining Rs0.03 to close at Rs6.62. and Pakistan Elektron Limited with 10.8 million shares, losing Rs0.90 to close at Rs19.19.

Foreign institutional investors were net sellers of Rs85 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, January 28^th, 2014.

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