Stock market stays bearish

Bearish trend prevailed at the Karachi share market for the second consecutive week ended on March 22, 2007 on the back of over-leveraged positions on CFS counters, SECP and stock brokers conflict on penalties on March 2005 crisis and the uncertainty on political front in the country.
The share market closed in negative column in three out of four working days of week and KSE-100 index closed at 11,294.98 points level, down by 0.7 percent or 79.05 points on week-on-week basis, while the free float market capitalisation-based KSE-30 index declined by 97.13 points and closed at 14,155.45 points level.
The market witnessed dull activity throughout the week and the average ready market daily volumes decreased by 25.92 percent to 136.01 million shares as compared to previous week's volumes of 183.60 million shares, and the futures market turnover declined by 1.75 percent to 58.80 million shares against 59.85 million shares traded during previous week. The overall market capitalisation stood at Rs 3.07 trillion on the end of the week.
The week started on a negative note and the index lost 232.74 points on Monday. However, the President's televised interview restored investor confidence, resulting in 190.06 points recovery on Tuesday. Despite this, the last two trading sessions, on Wednesday and Thursday, remained range-bound with relatively thinner turnover, showing investors' cautious approach. The index lost 34.73 points on Wednesday and 1.64 points on Thursday.
Khurram Schehzad at Invest Capital & Securities said that the sectors which escaped the decline on week-on-week basis were mostly the neglected ones like leather & tenneries, woollen, jute and food & personal care-products sector with 6.5 percent, 6.4 percent, 5.6 percent and 5.2 percent of capital gains, respectively. Conversely, sectors which were hit hard included technology & communication, fertiliser, oil & gas marketing and synthetic & rayon with 5.9 percent, 4.2 percent, 3.7 percent and 3.1 percent of capital loss respectively during the week.
Farhan Aziz at Jahangir Siddiqui Securities said that the two key financial sectors including banking and insurance remained in the limelight and gained 0.85 percent and 0.12 percent respectively, despite broader market's sluggish behaviour. Contrarily, the overall energy sector came off, where oil & gas marketing, refineries and E&P sectors declined by 3.73 percent, 1.49 percent and 1.43 percent respectively.
Ahsan Mehanti, CEO of Shehzad Chamdia Securities, said that the main reasons for negative close were including political uncertainty, investor preferred selling due to a long weekend with next week to witnessed pressure due to squaring up of positions of future rollover week, uncertainty over PSO privatisation proceedings, SECP and stoke brokers conflict on penalties of March 2005 crisis and developing geo-political issues.
Jawad Haleem at Atlas Capital Markets said that with political and privatisation related activities to some extend now having been discounted by investors, a major move in either direction seemed unlikely in the short run.