Market watch: Index starts off buoyantly, inflation dampens spirit

Benchmark KSE-100 index rises 8.15 points.

KARACHI: The stock market started off in a positive way before inflation figures meant that activity diminished significantly. 

The Karachi Stock Exchange’s (KSE) benchmark 100-share index rose 0.03% or 8.15 points to end at 28,921.13.

Fareesa Baig of Elixir Securities said the index opened strong. “However, this was before trading became volatile and closed nearly flat after having surged by +0.8% during the day,” said Baig. “Mid-day inflation announcement dampened sentiments.”

Baig said leading the charts was Engro Corp (ENGRO) +2.3% over reported institutional interest, while financials namely United Bank (UBL) +0.02%, MCB Bank (MCB) +0.34%, Habib Metropolitan (HMB) +3.3% and National Bank (NBP) +0.6% attracted interest.



“This was due to speculations with respect to the benchmark rate cut in the upcoming monetary policy, expected this month, subsided after CPI inflation for the month of April 2014 clocked in higher than expectations at 9.18% against consensus estimates of 8.2%.”



Baig concluded It was an unexciting day for cements, while autos were pressured over morning news of the government planning to reduce duties on imported cars in the upcoming budget, pushing Pak Suzuki (PSMC) -5% , Indus Motors (INDU) -4.7% and Honda Atlas Car (HCAR) -4.98% to their respective lower price limits.

JS Global analyst Syed Faran Rizvi said that due to unexpected inflation numbers the market remained unstable. “It witnessed a Doji Star Formation, indicating the bullish trend to continue,” said Rizvi. Trade volumes fell to 190 million shares compared with Wednesday’s tally of 251 million shares.

Shares of 358 companies were traded on the last trading session of the week. At the end of the day, 169 stocks closed higher, 172 declined while 17 remained unchanged. The value of shares traded during the day was Rs2.19 billion.

Lafarge Pakistan Limited was the volume leader with 18.5 million shares, declining Rs0.05 to finish at Rs14.07. It was followed by Maple Leaf Cement with 11.07 million shares, gaining Rs0.28 to close at Rs30.73 and Jahangir Siddiqui and Company with 9.4 million shares, declining Rs0.18 to close at Rs11.82.

Foreign institutional investors were net buyers of Rs831 million during the trade session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, May 3^rd, 2014.

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