Share prices on the Lahore Stock Exchange (LSE) drifted 11.23 percent lower on continued worries over what the brokers said the key issue of judges' restoration, country's economic woes, and Afghan president's threatening statement against Pakistan during the outgoing week.
Trading resumed on first day of the week under review with high uncertainty caused by political rumours, and there was hardly any let-up in the trend in subsequent sessions. There was only one session in which the market showed a partial recovery and ended in green zone while in the remaining days, it traded under heavy selling pressure, caused by multiple rumours that badly damaged the market sentiment.
Foreign investors also lacked interest and constant SCRA fallout shattered local investors' confidence. They said that all prime sectors, including the oil and gas sector and banks suffered widespread losses while volume though improved on the weekend, was still much below the required mark.
At the end of the week, the LSE-25 Index registered a net loss of 465.59 points to 3,667.64 from 4,133.23 points. Trade turnover totalled 16.273 million shares compared with 9.318 million, showing an increase of 6.955 million shares.
The share market crashed on first day of the week under review, losing 5.13 percent on Afghan President Karzai's statement about attack on Pakistan and news of government plan about shifting its deposits from other banks to the State Bank of Pakistan. The LSE-25 Index came down to 3,921.14 points from 4,133.23, registering a massive loss of 212.09 points.
Volume stayed flat at 9.203 million shares compared with 9.318 million shares. Karzai's statement, in which he threatened to attack Pakistan, sent negative waves in the market while the government plan to transfer its deposits from banks to the central bank added fuel to fire. Resultantly, all major sectors, including oil and banks plunged.
Sluggish business again gripped the market on second day with equities remaining under heavy pressure, but partial recovery in last session helped it end with a positive note. Share prices also dipped on third day losing 2.7 percent since investors lacked confidence following the political uncertainty and mounting tension on Pak-Afghan border. The LSE-25 Index came down by 106.96 points to reach 3,826.58 from 3,933.54 points.
Daily average turnover declined to 10.990 million shares from 11.525 million. Some banking stocks and Adamjee Insurance moved in forward direction while the broader market showed a dismal picture.
Mainly hit by the political unrest, the sentiment stayed depressed on Thursday, and the market shed another 100 points with a slight improvement in the trade turnover. The LSE-25 Index finished the session at 3,723.64 points as against 3,826.58, registering a decline of 102.94 points. Daily average turnover, with an increment of 2.424 million shares, reached 13.415 million from 10.990 million shares.
The market painted a dull picture amid lack of support from institutional side. In addition to political uncertainty, NAB action against former officials of the Bank of Punjab also upset investors and they off-loaded their holdings in panic.
The share market received further 1.5 percent loss on last trading day of the week as rumours pertaining to resignation of President Musharraf led to heavy sell-off.
The LSE-25 Index, with a net fall of 56.36 points, closed at 3,667.28 compared with previous closing at 3,723.points. Volume reached 16.273 million shares from 13.415 million, depicting an increase of 2.858 million shares. The market took good start on a report that a local consortium of financial institutions was ready to buy in prime scrips. On the back of this news, the index escalated up by over 200 points in early trading, but later news about resignation of Musharraf badly hit the sentiment.
The stock market has been on the lower side during the whole week under review, and is unlikely to rebound immediately in absence of any support from the institutional side, brokers said. The recent meeting between Nawaz Sharif and Asif Zardari has remained inconclusive, which has further disappointed the market people, they added.
According to them, under the prevailing political situation, institutions are not ready to take any risk. Constant outflow of SCRA has made the local investors believe all is not well on the political and economic fronts of the country, a trader commented.
According to analysts, smooth settlement of the issue of judges will not only enable the government to divert attention to other key issues, but also end uncertainty in the market, bringing investors back in the market.
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