The share prices received heavy battering at the last hour of trading session on Monday, despite some positive development last weekend that banks would arrange Rs 20 billion for margin financing to stock players. The KSE-100 index denoted a decline of 104.56 points, or 1.47 percent, to 6996.82 as compared with 7101.38 of Friday. The volume fell to 197 million shares as against 275 million shares. The market capitalisation slipped to Rs 1.98 trillion from Rs 2 trillion.
The market opened on a very positive note owing to the combined effects of the extension granted on phasing out of COT/badla by SECP and the setting up of a consortium of financial institutions to provide Rs 20 billion to facilitate phasing out and replacing COT with margin financing. However, after touching a high of 7252 points, the index reversed and declined sharply by approximately 250 points to just above the 7000 level. This decline came despite earnings announcements by the KSE giants--PTCL, OGDC and PPL--which were at par with market expectations (EPS of Rs 4.18, Rs 5.68 and Rs 9.03 respectively), said Jawad Haleem, research analyst at Atlas Investment Bank.
At the end, the index closed 104 points down at 6997 points amid low volume of 198 million shares, down 28 percent from 276 million shares previously. PTCL was the only major company to record a gain of Rs 1.3 closing at Rs 61.95. Apart from that, declines were witnessed in almost all major scrips. On the whole, 95 companies closed in positive territory, whereas 177 companies declined and 33 companies remained unchanged.
Hasnain Asghar from Aziz Fidahusein said that the assurance from monetary personnel regarding availability of funds in margin financing and a common view that issues had settled allowed the bulls to have a field day. The market got support following the announcement of healthy financial results indicating growth particularly in the banking stocks and oil and gas sectors which pushed the index. However, profit-taking correction eroded the initial gains and the market closed on a negative note.
Technically, minor support stays around 6970-6977 while the overhead resistance stays at 7250-7257. Absence of fresh funds would continue to disallow market men to capitalise on the availability of main stocks at discounted levels indicating further adjustment.
Saad Intisar from Live Securities said that after a small spurt in share prices, profit-taking activity prevailed throughout the session where equities fell across the board. With the badla phase-out issue finally resolved and the new rules for the futures market in vogue, the market was expected to gradually settle down. Volatility during the week was anticipated to remain high as corporate results keep pouring in, including that of heavyweights such as PSO, Sui Northern Gas and NBP. "We expect the market to find major support around the 6700-point level and suggest further weakness as an opportunity to accumulate positions in OGDC, Pakistan Oilfields, PTCL, NBP and Fauji Fertiliser."
PTCL, on turnover of 80 million shares, rose Re 1 to Rs 61.95; OGDC slipped to Rs 92.70 from Rs 95.15 on trading of 33 million shares; Fauji Fertiliser Bin Qasim lost Rs 1.50 to Rs 29.40 on deals of 11 million shares; PSO depicted decline to Rs 349.05 from Rs 367 on business of 9.6 million shares; and NBP closed at Rs 94, ie lower by Rs 1.50, on 8.2 million shares trading.
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