KARACHI: The stock market continued its dismal run as foreign selling, coupled with reports of regulatory action against major stock market players, took its toll on the index that finished close to 32,500. Investors remained on the sidelines as the government decided to increase gas tariff, keeping select stocks under pressure.
At close on Tuesday, the Karachi Stock Exchange (KSE) benchmark 100-share index fell 0.89% or 293.98 points to end at 32,566.59.
Elixir Securities analyst Faisal Bilwani said Pakistan equities continued their ride in the red as anxiety continued to trump excitement. “Anxiety over foreign selling continued to trump excitement over likely rate cut and positive news flow on macros,” said Bilwani. “Moreover, reports related to broker investigations and government’s decision to increase gas tariff ensured value hunters stayed on the sidelines.
“With volumes on KSE-100 being 25% less than the previous week’s average, sellers are struggling to offload.
“Key players and local value buyers await clarity on flows direction particularly from foreign investors that have been active in index stocks namely Lucky Cement (LUCK, -1.5%), United Bank (UBL, +.3%), Maple Leaf (MLCF, -3.8%) and MCB Bank (MCB, -1.1%).”
Meanwhile, JS Global analyst Ahmed Saeed Khan said continuous foreign selling induced local investors to book profits to preserve liquidity.
“The cement and the fertiliser stocks led the market’s decline as a 16-64% proposed increase in gas tariff will hit profitability of both sectors,” said Khan.
Trade volumes rose to 132 million shares compared to 99 million on Monday.
Shares of 354 companies were traded on Tuesday. Of these, 266 declined, 65 closed higher and 23 remained unchanged. The value of shares traded during the day was Rs7.5 billion.
Pak Elektron was the volume leader with 12.6 million shares, losing Rs2.75 to close at Rs52.43. It was followed by Fauiji Fertilizer Bin Qasim Limited with 11.5 million shares, losing Rs2.75 to close at Rs53.17 and Jahangir Siddiqui and Company with 9.1 million shares, losing Rs0.95 to close at Rs16.87.
Foreign institutional investors were net sellers of Rs71 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 11th, 2015.
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