Heavy badla rates and investment trimmed share values and the index on the first day of the new week at the Karachi Stock Exchange (KSE) ended in the negative column. The KSE-100 index fell 17.61 points, or 0.32 percent, to 5502.56 from 5520.17 on Friday. The volume declined to 248 million shares against 336 million shares.
Maria Faridi, research analyst from WE Financial Services, said that correction was due in the market as both volume and weighted average badla rates since last week were at alarmingly high level, indicating that weak holders would enter the market. The current badla volume was Rs 27 billion, which the market was noticing after two or three months.
Telecom sector remained under pressure as PTCL, the major player, entered the overbought territory. Askari Bank, despite pressure in the market, remained on the positive side making a new high of Rs 90.20. Cement and fertiliser sectors were under tremendous pressure but recovered in the end. "We foresee more correction in coming two or three days," she said.
Salman Ahmad from Aba Ali Habib said that the market suffered correction as heavy badla rates and investment forced the investors to adjust their portfolios. The market is still in the overbought zone and may suffer further correction in the coming days. However, positive developments, such as Prime Minister Shaukat Aziz's visit to India, Privatisation Commission's decision to call fresh EOIs for PTCL and US government's decision to approve $300 million loan, might help curtail the downward trend, he said.
Humbal Haroon from Akbarally Cassim said that the market opened in the negative zone as investors and punters got nervous at the 5500 index level. Selling pressure persisted throughout the session. However, buying in select scrips continued. Fauji Fertiliser Bin Qasim was the volume leader of the day as speculative buying in the scrip sparked market interest.
The badla decreased by 430 million rupees. There was major badla decrease in Sui Northern Gas--by 11 percent. The badla rates increased to over 12 percent as banks faced liquidity crunch due to higher money market rates and huge withdrawals for Eid impacting the banks position.
Hasnain Asghar from Aziz Fidahuesin said that increase in badla rates added to the misery of the overbought punters. Dips in the main stocks prompted institutions to lend support, helping some of the frontline stocks to recover.
The index found support around 5483-5488 and managed closing within the technical support of 5496-5503 (5502).
Fauji Fertiliser Bin Qasim gained 60 paisa to Rs 22.95 on business of 52.709 million shares; PTCL lost 15 paisa to Rs 40.45 on trading of 23.133 million shares; Lucky Cement closed at Rs 38.95, higher by 35 paisa, on a volume of 15.171 million shares; Nishat Mills rose 15 paisa to Rs 54.25 on turnover of 14.758 million shares; and D.G. Khan Cement lost five paisa to Rs 52.05 on deals of 14.161 million shares.
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