KARACHI: Investors chose to stay on the sidelines despite a rate cut in the monetary policy, with rumours of a few brokers being investigated casting a shadow over trading activity.
After a positive start, which saw the index climb over 33,800, profit-booking was witnessed as investors exercised caution. Financials saw the least activity while the rest of the market shared a similar trend.
At close on Monday, the Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.86 % or 287.99 points to settle at 33,384.73.
Elixir Securities analyst Faisal Bilwani said Pakistan equities closed negative in lacklustre trading as weekend announcements of a 50 basis points cut by the State Bank of Pakistan turned out to be a non-event.
“Stocks opened positive with investors cheering the central bank’s decision in early trade,” said Bilwani. “However, exceptionally thin volumes due to lack of interest turned moods sour.
“Banks led the decline while wider market also was lower with oil stocks contributing to slide tracking global crude.
“Macros were broadly ignored while rumours loomed related to broker investigations and compliance issues.”
Meanwhile, JS Global analyst Ahmed Saeed Khan said market sentiment remained bearish as an antagonistic attitude was witnessed on SBP’s decision to cut interest rates.
“Volatility prevailed in Monday’s session where initially the index went +177 points, but confidence soon shattered to close -0.86%,” said Khan
“One thing becomes evident that the Securities and Exchange Commission Pakistan’s investigation against a few market players should not be taken lightly as they restrain themselves from trading.
Trade volumes fell to 133 million shares compared with Friday’s tally of 151 million shares.
Shares of 353 companies were traded on Monday. At the end of the day, 75 stocks closed higher, 266 declined while 12 remained unchanged. The value of shares traded during the day was Rs5.2 billion.
Byco Petroleum was the volume leader with 16.6 million shares, gaining Rs0.75 to finish at Rs25.02. It was followed by Dewan Cement with 9.7 million shares, losing Rs0.12 to close at Rs17.72 and Pak Electron with 9.1 million shares, losing Rs2.11 to close at Rs75.51.
Foreign institutional investors were net sellers of Rs110 million during the trade session, according to data maintained by the National Clearing Company of Pakistan Limited.
Published in The Express Tribune, September 15th, 2015.
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