LSE stays bearish

Bears continued gripping the local share market for the second consecutive week, with the index losing almost 6-percent amid low turnover, which, according to experts, was caused by lacking interest on the part of institutions and other potential players.
Equities stretched previous week's losses and ended this weekend with a bearish note too, because of technical correction, which prolonged unexpectedly to cast dark shadows over the market, analysts said. The market portrayed a dull picture with equities showing downturn in four, out of five-days of the week, they added.
They, however, opined that the market has shed weight heavily, losing over 9-percent in past two weeks; and was expected to take a turn on technical ground in the approaching week. The market will remain closed on Monday on account of May Day; and will re-open on Tuesday, May 02, 2006.
The analysts said that the investors were disturbed due to futures settlement for the month of April. However, they viewed that there was no other technical reason for people's remaining on sidelines. With smooth settlement for April futures, the market will start picking up, the analysts viewed.
The LSE-25 shed 328.26 points (5.93 percent) to finish week under review at 5199.00 points as compared to 5527.26. Volume retreated to 47.540 million shares from 64.314 million, depicting a decline of 16.774 million shares or 26.08 percent.
The market, on first day of the week under review, underwent battering following lack of interest from big players, as a result of which, the index shed 84.57 points or 1.53 percent to close at 5442.69 compared with 5527.26. There was an alarming decline in turnover, which retreated to 37.929 million shares from 64.314 million, depicting a fall of 26.385 million shares or 41-percent. The sentiment remained depressed because of selling pressure in key chips, including banks, cements and oil & gas sector.
According to an analyst, foreign funds heavily sold while the local investors, including the institutions, stayed at distance, which resulted in low volumes. However, another analyst denied foreign selling at any stage, saying lack of interest from the big players was the prime factor for low turnover.
Equities moved both the ways on the second day on Tuesday; and finally settled in positive column amid ascending transaction volume, on account of fresh buying in banking sector shares. The LSE-25 index improved by 72.06 points, closing at 5514.75 against 5542.69, while trading turnover increased to 47.315 million shares as compared to 37.929 million shares.
Banking sector performed well and National Bank, United Bank, MCB Bank, Bank of Punjab, Union Bank, Allied Bank and Askari Commercial Bank helped market in gaining strength with the support of PPL and OGDC.
The share market depicted a mixed trend on Wednesday, amid volatile trading to finally finish with a weak note. The LSE-25 index slipped back to 5478.92 points from 5514.75, registering a decline of 35.83 points or 0.64 percent. Volume improved to 65.307 million shares from 47.315 million, posting a rise of 17.991 million shares or 38.02-percent. The market moved both ways and failed to settle down because of uncertainty owing to April futures settlement and the budget-related worries.
Equities extended the overnight losses and continued drifting lower on Thursday, with the index shedding over 100 points amid declining turnover, on account of lacking interest from big players. The LSE-25 index closed at 5374.80 points compared with 5478.92, declining by 104.12 points. Turnover descended to 45.556 million shares from 65.307 million, registering a decrease of 19.750 million shares.
Sentiment remained depressed throughout the day; and the market received across the board losses, with exploration companies, banks and insurance sector undergoing heavy battering. The market lacked interest from institutional players while individual investors sold in panic that forced the index nose-dive. Pakistan Premier Fund and PICIC Investment Fund showed improvement while Pakistan Oilfields and Adamjee Insurance were the top losers.
Downward movement also persisted on last trading day of the week (Friday) and the market shed another 3.27-percent due to multiple factors, particularly the futures settlement concerns.
The LSE-25 index moved down to 5199.00 points from 5374.80, showing a net fall of 175.80 points. Turnover slightly surged to 47.540 million shares from 45.556 million of the previous session, posting a rise of 1.983 million shares. The market opened on a depressed note and subsequently there was no pause in the trend. However, despite overall depressed sentiment, Union Bank and Nishat Mills strengthened their positions while oil sector was the hard-hit sector followed by National Bank.
The market has been under consolidation phase for the two consecutive weeks; and has trimmed the weightage a lot; therefore, chances for a recovery are very strong in the upcoming week, an analyst at a leading brokerage house said.
According to him, now the market has achieved the levels where institutions could go for fresh buying. But, he added, the market might show volatility, therefore, small investors are advised to restrict themselves to their buying capacity while those who have sold out their stocks should remain on sideline.
The market performance mostly depends on oil and gas sector shares, which could be trend setters in the week ahead, he observed.