The much-awaited technical correction was witnessed at Karachi Stock Exchange (KSE) on the last working session the week on Friday because of overbought situation after badla investment reached new highs. The KSE-100 index showed a decline of 37.67 points, or 0.66 percent, to 5700.82 as compared with 5738.49. The business rose to 580 million shares, against 512 million shares of Thursday.
The market opened on a positive note and made the high of 5774.86 during the first session, but selling pressure from financial institutions and individual investors increased the number of casualties with most of the investment stocks and blue chips closing with the major declines.
As a result, 224 companies showed minus signs, against 139 gainers, with 50 remaining unchanged.
The high badla investment resulted in heavy selling from the individual and retail investors. Following the selling spree it was expected that the badla investment would move down and give ample space for some more movement. The one important factor for the market movers was that the index resisted 5700 points level and might force some buying in the coming week, helping to sustain above this mark, dealers said.
Tariq Hussain Khan, manager research of Live Securities, said that the downward spell was mainly due to heavy COT volumes in blue-chip items. Another contributing factor was the overbought situation that created uncertainties among investors. It seemed that investors did not take seriously the COT figures. Despite drastic selling, Nishat Mills, Sui Northern Gas, Hubco and National Bank were in the limelight.
The market dipped during the second session, but bear-run was checked after institutional investors entered the ring with heavy buying orders, helping the market towards the end to recover. "We expect the market to start its positive trend on account of expected positive pattern in the days to come".
Kashif Shabbir, research analyst from Rafi Securities, said that the bullish drive was halted because of profit-taking activity which emerged from institutions and punters on account of higher COT levels.
Investment in carryover transactions, or badla level, decreased to 29.73 billion rupees from 30.70 billion rupees. Sui Northern was the volume leader while the Nishat shares remained the attraction of the investors. Both these scrips closed on a positive note.
"We expect the market to consolidate above the 5620 support level next week as the strong corporate earnings from the banking, fertiliser and textile shares would not allow the investors to stay away from the rings" he said.
Ahmed Ashraf Shaikh from Akbarally & Cassim said that the past bull activity continued during the initial hours, however during the mid-day exposure related issue led to erosion in share prices where intra-day correction of around 90 points was witnessed within a few minutes.
The major scrips leading decline were Sui Northern Gas and PTCL. Selling in stalwarts resulted in across the board selling when first session terminated at 12 noon.
However, in the second session, recovery was seen in the index as punters and institutions took advantage of the erosion. This helped the market to close with a reasonable correction of 36 points.
Sui Northern Gas gained 50 paisa to Rs 59.40 on a volume of 117 million shares; Nishat Mills moved up to Rs 66.30 from Rs 62.85 on trading of 75 million shares; Hubco gained 90 paisa to Rs 32.40 on deals of 65 million shares; NBP rose 30 paisa to Rs 74.55 on deals of 35 million shares; and MCB suffered a decline of Rs 1.85 to Rs 53.25 on transactions of 34 million shares.
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