Market watch: Decline in oil price, political unrest put index in the red

Benchmark KSE-100 index decreases 302.51 points.

KARACHI: Bears dominated the trading session as the index ended the day in the red amid political unrest. It dropped below the coveted 32,000-point barrier as the oil and gas sector took a beating and investors decided to book profits on Wednesday.

At close, the Karachi Stock Exchange’s (KSE) benchmark 100-share index decreased 0.94% or 302.51 points to end at 31,781.65.

JS Global analyst Muhammed Mobeen said bears dominated the KSE-100 Index after an initial spike. “As political unrest builds momentum, investors opt to book profits and get sidelined,” said Mobeen.



“Within the oil and gas sector, Pakistan State Oil (-1.4%) and Shell (-2.0%) witnessed decline as oil prices declined towards a five-year low.

“Mari Petroleum reached its lower circuit following a cut in subsidy by the government for exploration.

“Within the pharmaceutical sector, profit-taking was witnessed as Feroz and Abbot Pakistan both reached their lower circuits.

“Going forward, we expect the market to remain volatile due to political unrest in the country, however, any further dips in the banking and cement sector should be considered an opportunity to buy.”

Meanwhile, Arif Habib Corporation Ahsan Mehanti said that stocks closed bearish led by oil after Brent crude oil prices fell.

“Falling global equities, institutional profit taking on weak earnings in the oil sector played a catalyst role in bearish activity at KSE despite support in selected cement stocks on falling trend in coal prices.”

Trade volumes fell to 257 million shares compared to 278 million on Tuesday.



Shares of 376 companies were traded on Wednesday. Of these, 280 companies declined, 81 closed higher and 15 remained unchanged. The value of shares traded during the day was Rs13.8 billion.

K-Electric Limited was the volume leader with 34 million shares, gaining Rs0.28 to close at Rs8.71. It was followed by Pak Elektron with 29.5 million shares, losing Rs0.24 to close at Rs35.75 and Bank of Punjab with 22.7 million shares, losing Rs0.21 to close at Rs9.59.

Foreign institutional investors were net buyers of Rs613 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, December 11^th,  2014.

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