Bearish oil sector pulls market down slightly

Fahad Kazmi April 20, 2010

KARACHI: Stocks ended lower because of selling in oil shares following a drop in international oil prices. The Karachi Stock Exchange’s benchmark 100-share index closed 0.27 per cent, or 28.36 points, lower at 10,641.52 points. “Weak sentiments led by limited foreign participation resulted in strong resistance near the 10,700 level,” said Farhan Seth, an analyst at Topline Securities. “Significant corporate results failed to catch investors’ attention,” said Farhan.

Given the current structure of the market, the KSE-100 index is likely to witness consolidation and is expected to trade in a range of 10,800 – 10,575, said Nurali Barkatali, an analyst at BMA Capital. The benchmark KSE-100 started off on a positive note climbing to an intraday high of 10,730 early in the day. It went on to witness rangebound movement for a second consecutive day, as investors preferred to stay cautious at high levels, said Ahmed Rauf, an analyst at JS Global Capital.

Trading volume fell 18 per cent to 137.06 million shares compared with 166.8 million on Monday. Second and third-tier stocks stood as volume leaders while some activity in the oil, fertilizer and banking sectors was also witnessed and as a result the total exchange value stood at Rs5.22b, over 17 per cent higher than Monday’s tally. Out of a total of 414 active securities, 176 increased, 208 declined and 30 remained unchanged. Lotte Pakistan was the volume leader for the second straight day with 11.41 million shares losing Rs0.24 to finish at Rs12.16. It was followed by TRG Pakistan with 10.05 million shares losing Rs0.09 to close at Rs5.7 and WorldCall Telecom with 7.49 million shares losing Rs0.13 to close at Rs4.97. The oil and gas sector remained under pressure throughout the day due to lower international crude oil prices. Oil and Gas Development Company’s share price dropped one per cent to Rs133.39 as a result.

“Falling international oil prices overshadowed better expected results in the oil and gas sector, as all major oil stocks suffered,” said Ahmed Rauf. The Supreme Court’s judgment against Haris Steel fueled a major rally in the Bank of Punjab causing it to close at its upper limit. Bank of Punjab was also the KSE-100’s top gainer of the day, its stock price closing 6.3 per cent higher at Rs16.88. Unilever Pakistan was not too far behind with a five per cent share price rise to Rs3,675. Lafarge Pakistan Cement was in the losers list after dropping 3.91 per cent to Rs4.42 as investors booked profits. Standard Chartered Bank, yesterday’s top gainer, closed in the red shedding 2.82 per cent to close at Rs8.66.


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