Lack of buying interest from big and potential investors kept the local stock market range-bound with equities moving erratically during the last week, depicting lack of public confidence in the market. According to stock analysts, the market tone remained highly volatile and unpredictable on account of confusion over the issue of COT as there were conflicting reports over the issue, due to which investors' confidence was dull and the market failed to settle down and take a clear direction.
The LSE-25 index was up by 12.09 points or 0.33 points during the week under review, reaching 3615.92 points from 3603.83 points while the volume came down by 31.988 million shares or 48.66 percent, retreating to 33.737 million shares from 65.725 million shares.
The first session of the week began with a weak note, and lack of investors' interest on account of confusion over the COT issue kept business activity range-bound, as the index ending in negative zone and losers thumping the gainers with a sizeable margin.
The index moved down to 3560.39 points from 3603.83, registering a net decline of 43.44 points, while the volume was also drastically down by 22.242 million shares to 43.483 million from 65.725 million shares.
On the back of news that a mechanism for the margin financing has been evolved, and a committee, headed by a former SBP governor and comprising bankers and brokers has been constituted.
The market showed positive signs in early hours with fresh buying in fuel and energy sector. This helped the index pick up strength and gain 150 points. But the market failed to maintain the rising tempo due to selling pressure, which dragged the index in the negative zone, with PSO, PPL, Nishat Mills, OGDC and banking stocks receiving fresh losses.
On the second day, bulls took control of the driving seats with equities registering across the board gains amid ascending transaction volume on account of fresh buying, triggered by hope of COT extension in 30 companies.
The index soared by 117.86 points, while trading turnover also showed a visible improvement. PTCL, petroleum and fertiliser sectors appeared as the key forces to lift the sentiment up. The trend also prevailed on the next day with the index gaining another 45 points or 1.22 percent enabling the LSE index to close above 3,700 point's level, while the volume also jumped by 39 percent to reach 73.357 million shares.
During the last two days of the week, the market again showed weak signs on negative news that Senate committee formed to probe the market crisis has sent notices to some of the stock brokers, asking them to submit details of their accounts. This sent shock waves in the market, and it remained jittery, especially on the last two days of the week under review.
Dr Shahid Zia, head of research at Switch Securities Ltd, said the tone on which the market ended the past week did not imply a rosy picture of the market. The volume is very low, which means that people are scared to go for fresh buying, he added.
Due to the crisis, they have suffered heavily, therefore, when the market shows positive signs, they opt for selling to recover their losses.
The corporate sector have announced very encouraging results, but the market has ignored this positive factor which means people's confidence is badly shaken, and they are scared to return to the market. This state of affairs is likely to continue till the regulator, SECP, takes concrete measures to make people believe that recent crisis-like situation will never occur again, he added.
Moreover, he pointed out that downward revision of upper circuit breakers and increase in interest rate are also factors keeping activity low in the market. "Under the given situation, I would like to suggest people to remain on sidelines till the issue of COT is settled", said Dr Shahid Zia.
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