Market watch: Rumours, absence of triggers add to index’s fall

Benchmark KSE-100 index drops 403.09 points.

KARACHI: Rumours of regulatory action against brokers resulted in thin activity at the bourse as the market closed below the 33,000-point level. Expectations of a further cut in discount rate dented the banking sector but the overall sentiment remained directionless as the KSE’s decline continued.

At close on Monday, the Karachi Stock Exchange (KSE) benchmark 100-share index fell 1.21 % or 403.09 points to end at 32,860.57.



Elixir Securities analyst Haris Ahmed Batla said less than a 100 million shares exchanged hands as the week kicked off on a dull note. “Pakistan equities opened sideways but soon plunged in the red as investors’ participation seemed minimal,” said Batla. “Financials, namely MCB Bank (MCB, -3.08%) and United Bank Ltd. (UBL, -2.87%) damaged early momentum.

“This was due to investors expecting a possible rate cut in the coming monetary policy, however, the same failed to add spice to cement plays that also closed in red,” said Batla.

“DG Khan Cement (DGKC, -1.82%) and Maple Leaf Cement (MLCF, -.75%) failed to generate institutional interest while Lucky Cement (LUCK, -2.87%) lost grounds on reported foreign selling.”

Arif Habib Commodities Chief Executive Officer Ahsan Mehanti said stocks closed lower amid institutional profit taking after fall in global commodities.

Mehanti said that weak global equities, limited foreign interest and consolidation in blue chip scrips post major earning announcements at KSE played a catalyst role in bearish activity at the KSE.

Trade volumes dropped to 99 million shares compared to 134 million on Friday.

Shares of 343 companies were traded on Monday. Of these, 218 declined, 103 closed higher and 22 remained unchanged. The value of shares traded during the day was Rs5.4 billion.



Jahangir Siddiqui and Company was the volume leader with 10.4 million shares, losing Rs0.17 to close at Rs17.82. It was followed by K-Electric Limited with 8.7 million shares, gaining Rs0.16 to close at Rs7.82 and TRG Pakistan Limited with 5.6 million shares, gaining Rs0.15 to close at Rs15.22.

Foreign institutional investors were net sellers of Rs662 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, March  10^th,  2015.

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