Bears' roars were heard loudly and bruised the small investors as share prices at KSE plunged on Wednesday, where index touched the six-month low level. The KSE-100 index lost 90.02 points, or 1.77 percent, to 4997.35 as compared with 5087.37. The volume rose to 191 million shares as against 176 million shares of Tuesday.
Shehzad Aslam from SC Securities said that the market broke all major support levels as a result of massive selling in core index scrips. Market participants have been advised to remain on the sidelines and wait for a turnaround before initiating any position.
Technically, the market remains in an oversold position and any positive news on the fundamental or political front would trigger a buying spree.
Azhar Javid, research analyst from WE, said that the bears finally succeeded in breaching the 5000 psychological barrier as the index closed at 4997 points.
There were hiccups of recovery in between but none managed to sustain the level and reversed the trend and the index dropped to below 5000 points mark.
Only Chakwal Cement, Hubco and Bank Alfalah managed to close in positive, otherwise it all was red across the board. "The market is expected to recover a little, but in the short term we expect the market to remain weak."
Aadil Ehtesham from Multiline Securities said that the six-month treasury bills auction of Rs 2 billion was the latest downbeat development for the market. Fertiliser sector was down due to government decision to import of 0.1 million tons urea to meet the demand for Rabi season.
"We are of the opinion that the market requires fresh funds while any positive news, either from economic or political side, could patch up the market's underlying pessimistic sentiment. In the absence of positive stimulus we are of the opinion that any recovery efforts would be shallow."
Humbal Haroon Katia from Akbarally Cassim said that the market finally reached under 5000 mark. The announcement from Cherat Cement helped in cheering cement lovers' mood.
The company declared 40 percent dividend and 25 percent bonus. It is currently trading at a profit earnings of 9, which makes it the best performing scrip in the sector. With the breaching of the 5000 level, support level is an indication that the market can fall further.
The badla decreased slightly by 120 million rupees. There was major badla reduction in NBP "and we recommend buy on dip strategy in NBP". The badla rates fell below the 7 percent mark, as enough financiers were available in the market.
OGDC moved down to Rs 59.10 from Rs 61.65 on business of 36 million shares; Chakwal Cement declined by 90 paisa to Rs 8.85 on turnover of 24.7 million shares; D.G. Khan Cement closed at Rs 54.20, ie Rs 1.65 on trading of 19.9 million shares; Hubco remained unchanged at Rs 31.20 on deals of 12.4 million shares; and PTCL gained 25 paisa to Rs 38.40 on trading of 11.5 million shares.
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