Bearish trend continued at the Karachi share market during the week ended on May 3, 2008 and KSE-100 index declined by 477.92 points to close below 15,000, at 14,956.82 points. The free float market capitalisation based KSE-30 index lost 635.83 points and settled at 18,010.92 points level. Market capitalisation declined by Rs 139 billion to Rs 4.585 trillion.
The market witnessed dull trading activity and the average daily volume of ready market declined to 227.828 million shares as compared to 251.476 million shares during a week earlier. The average daily turnover of futures market decreased to 56.034 million shares against 105.663 million shares.
The market opened on a positive note on Monday and the KSE-100 index increased by 44.48 points to close at 15,479.22 points on the back of fresh buying mainly in banking and oil sectors. The KSE-30 index surged by 56.30 points and settled at 18,703.05 points level.
On Tuesday, the market witnessed bearish trend as market participants opted for profit taking due to uncertainty over the reinstatement of judges issue and the KSE-100 index lost 161.92 points to close at 15,317.30 points level. The KSE-30 index also declined by 246.05 points to settle at 18,457.00 points.
Bearish trend continued on Wednesday and the KSE-100 index lost another 194.83 points to close at 15,122.47 points level due to selling pressure. The KSE-30 index declined by 297.59 points and settled at 18,159.41 points level. The market remained closed on Thursday on Labour Day.
The market witnessed selling pressure on Friday and the KSE-100 index lost another 165.65 points to close below 15,000 level at 14,956.82 points. The KSE-30 index declined by 148.49 points to close at 18,010.92 points level.
Usman Zahid, an analyst at JS Global Capital said that politics once again dominated the show as market remained largely volatile during the week due to political instability currently plaguing the country. Concerns that PML (N) may quit the government leaving PPP in a precarious situation as it does not enjoy simple majority forced investors to offload their holdings. There was some respite, however, as MQM finally decided to join the Sindh government.
Major companies listed at the KSE announced their quarter ended March 31, 2008 results. Banking sector results were far lower than expectations as earnings actually fell by 17 percent on yearly basis, thus keeping pressure on the sector as its capitalisation fell by 3.7 percent on weekly basis. Further, unexpectedly low result of Bank of Punjab (BOP) due to high provisioning also dampened the investor sentiment in the sector.
Moreover, poor results of cement sector had their impact as the sector fell by 2.8 percent on weekly basis. With a cloud of uncertainty looming over the market due to the political situation, net foreign selling was observed as NCCPL data showed a net outflow of $71.4 million during the week. Cumulative outflow for 2008 stood at $115.8 million.
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