Market watch: Oil under pressure, index ends in the red

Benchmark 100-share index falls 49.73 points.

Our Correspondent July 15, 2015
Benchmark 100-share index falls 49.73 points.

KARACHI: The market may have opened on a positive note, but profit-taking in overbought scrips across the board and pressure on oil prices steered the Karachi Stock Exchange (KSE)-100 index into the red.

At close, the benchmark KSE-100 index stood at 35,446.89, recording a fall of 0.14% or 49.73 points.

According to an analyst at JS Global, the cement sector led the rally but profit-taking was witnessed after news came in of Iran and six world powers sealing a historic accord to curb the Islamic Republic’s nuclear programme in return for lifting sanctions, bringing pressure on international oil price.

“Due to this news, oil sector came under pressure, as PSO, OGDC, POL closed down by 0.9%, 4.7%, 2.5% and 2.8%, respectively.”

“In the banking sector, BankIslami Pakistan Limited (BIPL) closed at its upper circuit as news came of SBP granting Rs20-billion loan. In the energy sector, K-Electric (KEL +0.3%) remained under pressure as the Senate standing committee reviews the utility’s privatisation, while Nepra remains in a fix over taking action against the company.

“In the fertiliser sector, Fauji Fertilizer Bin Qasim Limited (FFBL +4.7%) continued its euphoric growth on optimistic expectation over its financial result.”

Meanwhile, Topline Securities analyst Mohammad Rizwan said oil stocks stayed under pressure as removal of economic sanctions from Iran and Iran-Nuclear deal could lead to oil oversupply in the international market.

“Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGP) closed at upper circuit as government announced hike in gas prices after Eid, while major activity was witnessed in Dewan Salman Fibre Limited (DSFL), Azgard Nine Limited (ANL) and BYCO,” he said.

Shares of 380 companies were traded on Tuesday. Of these, 210 companies closed higher, 142 fell and 28 remained unchanged.

Trading volumes increased to 417 million compared to 345 million on Monday.

Dewan Salman was the volume leader with 32.2 million shares, gaining Rs0.55 to close at Rs3.42. It was followed by Azgard-9 with 24.7 million shares, gaining Rs0.51 to close at Rs7.80 and Byco Petroleum with 20.1 million shares, gaining Rs1.28 to close at Rs27.04.

Foreign institutional investors were net buyers of Rs106 million worth of shares during the session, according to data compiled by the National Clearing Company of Pakistan.

Published in The Express Tribune, July 15th,  2015.

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