Heavy selling pressure continued at the Karachi share market during the week ended on June 21, 2008 and the KSE-100 index witnessed a massive decline of 10 percent, or 1,286.28 points, to close at 63-week low level of 11,655.28 points.
The index has lost a massive chunk of 4,021.06 points in last 63 days from its all time high of 15,676.34 points recorded on April 18, 2008 to 11,655.28 points on June 20, 2008.
"Prevailing political instability, expectation of changes in interest rates, budget related issues, taxation on stocks market were major factors which invited panic selling, while disturbance on both borders of the country and CVT related rumours further weakened sentiment", analysts said.
The free float market capitalisation based KSE-30 index declined by 1,869.76 points and settled at 13,368.79 points level.
Market capitalisation declined by Rs 396 billion to Rs 3.592 trillion. Although, average trading volume of ready market increased by 7 percent, to 135.348 million shares, as compared to previous week''s average of 125.987 million shares, it was 41 percent lower than average volume of 227 million shares so far in 2008.
Average daily turnover of futures market increased to 50.895 million shares against 42.452 million shares.
The market started under heavy selling pressure on Monday on reports that the government has planned to shift its deposits from different banks to the State Bank of Pakistan, and continued despite clarification by the Ministry of Finance. The political uncertainty also contributed to the negative sentiment and the KSE-100 index lost 497.43 points to close at 12,444.13 points. The KSE-30 index declined by 687.26 points and settled at 14,552.29 points level.
On Tuesday, the start of the market was negative and the index hit 12,031.09 points intra-day low, down 412.57 points. However, late buying supported the index to recover the early losses. Finally, the index closed at 12,497.86 points level with a gain of 53.73 points. The KSE-30 index rose by 54.93 points and settled at 14,607.22 points level.
On Wednesday, the market witnessed heavy selling pressure due to declining oil prices in the international market, and the KSE-100 index lost 236.79 points to close at 12,261.07 points level.
The KSE-30 index declined by 412.77 points and settled at 14,194.45 points level. On Thursday, selling pressure continued due to prevailing uncertainty in northern parts of the country and President Musharraf''s statement regarding the US and European Union warning. The KSE-100 index plunged by 390.12 points to close at 11,870.95 points level. The KSE-30 index declined by 520.86 points and settled at 13,673.59 points level.
The market witnessed some buying in early hours on Friday and the KSE-100 index hit 12,082.52 points intra-day high, up by 211.57 points. However, the market could not continue its upward trend due to uncertainty on political font and rumours regarding President Musharraf''s resignation. The index closed at 11,655.28 points with a net loss of 215.67 points, while the KSE-30 index lost 304.80 points and settled at 13,368.79 points.
Farhan Mehmood, an analyst at JS Global Capital, said that politics once again dominated the show and the market remained largely volatile during the week due to major political uncertainty currently plaguing the country. Besides this, news related to enhancement of capital value tax from 0.02 percent to 0.04 percent also dragged the market during the later half of the week. Moreover, increase in cut-off yield to 11.5 percent on Treasury Bills in the last auction by State Bank of Pakistan also raised concerns regarding further hike in discount rates. As per latest figures, foreign selling of $23 million during the week further supported bearish sentiment. As a result, huge selling was observed across the board with banking sector plunging by 14.1 percent, cement by 11.4 percent, fertiliser by 8.9 percent and E&P by 7.4 percent.
Comments
Comments are closed.