Lahore stocks depressed

Hit by bomb blasts in Karachi and worries of law and order due to combined opposition's strike and protest calls in the country against the publication of blasphemous caricatures in some Western newspapers, the local share market mostly painted a depressed picture during the last week, losing 1.47 percent.
The whole week was full of rough strides and volatility, which kept equities, especially the index-based shares depressed. There was only one session on Tuesday when the market showed an encouraging movement under the lead of oil and gas sector.
Uncertainty prevailing on account of worries about February future clearing and settlement and law and order problem as a result of combined opposition's call for a countrywide strike over the issue of blasphemous cartoons, forced investors to squeeze their positions to avoid losses. Subsequently killing of five persons including a US diplomat added fuel to fire, raising investors' concerns over law and order problem in the country.
According an analyst, the blast could also affect the foreign investment flow in the equity market. The LSE-25 index retreated to 5602.11 points from 5682, registering a loss of 80.56 points or 1.47 percent. Volume declined to 61.599 million shares from 75.877 million, posting a fall of 14.278 million shares or 18.81 million shares.
The local share market crashed on first day of the week under review as heavy profit-selling, particularly in petroleum sector, marred activity forcing the index to shed 3.78 percent at the close. The LSE-25 index retreated to 5467.51 points from 5682.67, registering a loss of 215.16 points. Volume shrank to 68.337 million shares from 75.877 million, showing a decline of 7.540 million. Heavy selling pressure played havoc with equities, which fell like ninepins, casting dark shadows over the entire market. It appeared every one had come to sell and book profits at available margins that triggered panic in the market, they added.
Analysts described technical correction as main factor for the battering and said the market was over-priced, therefore, a wide-ranging correction was due. The market maintained the bearish trend throughout the session with petroleum shares such as Pakistan Oilfields, PSO and PPL receiving massive battering.
The LSE staged a good comeback on the second day (Tuesday) with equities gaining across the board amid ascending transaction volume on account of fresh buying in oil and banking sectors. The LSE-25 index improved by 174.90 points, closing at 5642.41 against 5467.51.
High volatility prevailed on the third day (Wednesday) on LSE, where share values failed to settle following panic selling in oil and gas sector in early hours, and subsequent recovery in second half of the session.
The LSE-25 index registered a marginal gain of 9.49 points to finish at 5651.90 as compared to 5642.41 points. On account of heavy selling, volume surged to 111.022 million shares from 74.131 million, showing a significant increase of 36.891 million shares.
The market maintained last day's bullish trend in the morning and due to interest in selective chips, the index mounted to 125 points in early hours, but later profit-taking set in, which changed the entire scenario. Initially profit-taking was witnessed in oil and energy sectors and banking stocks, but later it spilled over to other shares. There was, however, no negative development from the market point of view and it was profit-taking that disturbed the sentiment.
On second last day of the week (Thursday), the share values underwent losses on account of profit-taking following the news of bomb explosion in Karachi, killing five persons including a US diplomat. The LSE-25 index shed 68.01 points or 1.20 percent closing at 5583.89 points versus 5651.90. Turnover was significantly low to 73.423 million shares from 111.022 million, registering a loss of 37.599 million shares or 33.86 percent.
The market maintained last day's mixed trend in early hours of trading, paying little attention to the bomb blast incident in Karachi. However, later when the news of killing of a staffer of US consulate hit the market, people started off-loading in haste that caused panic. In initial hours, even after the bomb blast, it moved up and down and there was no panic selling. But as soon as the market people came to know that an American was among the dead they came in panic.
There was range-bound activity on last day of the week (Friday) with the tone remaining highly volatile because of fears of violence, as a result of strike call given by combined opposition to protest the blasphemous sketches published by western newspapers.
The LSE-25 index closed at 5602.11 points compared with previous day's 5583.89, posting a rise of 18.22 points. Volume further decreased to 61.599 million shares from 73.423 million of the previous closing session, showing a decline of 11.824 million. The market showed a mixed trading pattern with a volatile tone as investors preferred staying on sidelines fearing law and order problem, on account of the combined opposition's countrywide strike call for the day. Since most of the players including big ones, stayed aloof on the weekend, volume further came down in the market, a trader said, adding, the underlying sentiment continued to be bullish which showed internal strength in the market.
Despite fears among investors following bomb blasts and continuing protest over the issue of blasphemy, analysts predict a bright picture of the equity market, a broker said.
According to him, bomb blast in Karachi and protests by MMA may not have any significant impact on the foreign investment flow in the market. Petroleum sector because of news of new discoveries in NWFP has turned more attractive for foreign investment, therefore, it is guessed it will continue to be attractive for investors, an analyst said. According to him, now the market seems more lucrative for genuine investors than jobbers and traders, hence people with capacity to take deliveries will be the real beneficiaries under the prevailing state of affairs.