KSE sheds a massive 518 pts on selling pressure

[Naveed Yaseen]

KARACHI: The Karachi stock market witnessed heavy selling pressure on the first day of the trading week Monday as small investors squared their positions by offloading their holdings, analysts said.

The Karachi Stock Exchange (KSE) 100-share index shed a massive 518.51 points as the market closed at 11,177.31 points as compared to 11,695.82 points of the previous session. The KSE-30 index shed 632.96 points to close at 12,772.39 points.

Analysts said the market opened negatively 302 points and during later part of the trading session, the decline continued unabatedly.

However, the only positive feature of the market was better trading activity as the ready market volume was recorded at 69.929 million shares.

The market turnover increased 230.43 percent to 69.92 million shares as compared to 21.16 million shares traded in the previous session. The overall market capitalisation declined 4.26 percent to Rs 3.479 trillion as compared to previous session’s Rs 3.634 trillion. Out of 256 companies, 25 closed in positive zone, 222 in negative while 9 remained unchanged. Farhan Mahmood, analyst at JS Global Securities said circuit breakers were reverted to the previous levels, but the index continued to decline and this time with an extended capacity.

Although attractive levels did offer resistance to the float mainly in oil and gas exploration and marketing stocks, negative sentiments never allowed the so called value buyers, except for some, (who were chanting slogans against the 1 percent lower lock) to come in.

Hasnain Asghar Ali, analyst at Aziz Fida Husein and Co said recent changes made in the circuit breaker mechanism was finally made public (during the recent meeting called by the KSE management on Friday), ensuring the smooth payments was the idea and undoubtedly it was achieved as no risk management issues were heard, tight monetary policy and liquidity crunch on the other hand were blamed for not allowing the innovative changes in the mechanism to bear fruit, but other issues such as a constant flow of negative developments on almost all the sensitive fronts contributed to it and leading the way was certainly decline in the rupee value.

Ahsan Mehanti, senior analyst at Shahzad Chamdia Sec citing reasons of negative index of the market attributed it owing to the selling pressure on account of poor law and order situation, foreign selling, current account deficit, political uncertainty, high discount rate, and falling equity markets globally affected investors’ sentiments negatively.

The futures’ market turnover went down to seven million shares as compared to 7.34 million shares traded in the previous session. 25 of the companies closed in the negative while five remained unchanged. staff report

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