Bearish trend continued at the Karachi share market during the outgoing four-day week ended November 8 and, after witnessing a worst-ever decline of 636 points, the benchmark KSE-100 index settled at 13,423.87 points level, with a net loss 491.17 points on week-on-week basis.
Heavy selling was witnessed mainly from the foreign investors due to prevailing uncertainty on political front after imposition of emergency in the country, analysts said. KSE-30 index lost 860.08 points and closed at 16,013.71 points0.
Trading remained and the average daily volume of ready market declined to 246 million shares as compared to 264 million shares during a week earlier. The average daily turnover of futures market also declined to 53 million shares against 56 million shares previously.
Market capitalisation declined by Rs 146 billion to close at Rs 4.096 trillion. The outflow of portfolio investment from the country's equity market continued during the week and the foreign investors withdrew $130 million during the last two days of the week and SCRAs balances stood at $223 million on Thursday from $353 million on November 6.
On Monday, the market started under heavy selling pressure and there was worst-ever decline of 636 points on a single day to close at 13,279.24 points level due to imposition of emergency and rumour that President Musharraf had been placed under house arrest, which started panic selling. The KSE-30 index also witnessed record decline of 819.35 points and settled at 16,054.44 points level.
On Tuesday, the KSE-100 index recovered 146.87 points to close at 13,426.11 points on the back of late buying mainly in oil sector stocks. The KSE-30 index also gained 89.44 points to close at 16,143.88 points.
The investors' cautious stance continued on Wednesday due to political uncertainty. However, late buying, mainly in oil sector stocks, and institutional support helped the index gain 74.47 points to close at 13,500.58 points level. The KSE-30 index surged by 36.25 points to close at 16,180.13 points.
On Thursday, there was heavy selling pressure amid thin volumes as the investors stayed away due to prevailing uncertainty on political front in the country. Foreign investors also offloaded their holdings and the KSE-100 index lost 76.71 points to close at 13,423.87 points. The KSE-30 index also lost 166.42 points, closing at 16,013.71 points.
Jawad Haleem, analyst at Atlas Capital Markets, said that due to imposition f emergency, the index underwent largest single-day drop of 636 points. Following that, Moody's Investment Service cut its foreign and local currency bond rating outlook to 'negative' from 'stable', and Pakistan's credit rating outlook was cut by Standard & Poor to 'negative' from 'stable'. However, attractive levels provided an opportunity for investors to accumulate at the dips. Thereafter, the index made a 147 and 74 points recovery in two days, which was met with a 77 points decline in the last session of this shortened 4-day week.
Khurram Schehzad at Invest Capital & Securities said that the week was the gravest in the history of KSE as it saw 'Black Monday' with straight decline of 636 points. The emergency imposition coupled with rumours about arrest of political leaders and deteriorating situation in the northern areas of the country were the major negatives. Except for four sectors, the entire market was in the red zone.
Gainers during the week were Food & Personal Care Products by 3.1 percent, Jute by 2.5 percent and Glass & Ceramics by 1.5 percent while the major losers were Tobacco by 7.6 percent, Synthetic & Rayon by 6.3 percent and Leather & Tanneries by 6.2 percent. The Heavy weight categories namely Banks, E&P, OGMCs, Cement, Fertiliser and Telecom slimed by 5.2 percent, 3.0 percent, 0.6 percent, 3.0 percent, 3.3 percent and 3.7 percent respectively on week-on-week basis.
Usman Zahid at JS Global Capital Limited said that the week started off with negative sentiments due to the imposition of emergency within the country. Tensions on the political front, compounded by the prospects of sanctions and aid cut put the market under considerable pressure.
Also, Moody's and S&P revised Pakistan's outlook from stable to negative, further adding to the volatility. Insurance and Banks were the worst performers as their market cap declined by 6.5 percent and 5.2 percent respectively, whereas E&P sector performed relatively better than the market. Oil prices increased to a record $98 per barrel in the international market during the week, giving good support to the E&P and other energy stocks. Also, Petroleum Policy 2007 was announced during the week and this was received well by the E&P stocks.
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