Bearish sentiment persists on KSE

Bearish sentiment prevailed at Karachi share market during the week ended on June 6, 2009 due to investors' concerns over the coming budget and absence of any leverage product. The KSE-100 index declined by 381.99 points, or 5 percent, and closed at 6,894.62 points.
The market witnessed low trading and the average daily volumes at the ready counter declined to 110.968 million shares, or 27 percent, against previous week' 151.280 million shares.
Market capitalisation declined by Rs 111 billion to Rs 2.045 trillion. A net outflow of $12 million foreign portfolio investment was recorded during the week.
On Monday, the market witnessed mixed trend with the index oscillating between 7,326.85 points intra-day high and 7,195.38 points low. However, it closed at 7,210.34 points with a loss of 66.27 points with a total volume of 112.955 million shares.
On Tuesday, the index declined by 85.23 points to close at 7,125.11 points with 83.518 million shares. On Wednesday, Bearish trend continued and the index lost 135.17 points to close at 6,989.94 points with 139.705 million shares.
On Thursday, the index declined by 111.80 points to close at 6,878.14 points, with 93.595 million shares. On Friday, the index hit 6,978.72 points intra-day high on the back of fresh buying. However, despite selling pressure in late hours, the index managed to close in positive at 6,894.62 points, with a net gain of 16.48 points with 125.067 million shares.
Bilal Qamar, analyst at JS Global Capital, said that budget uncertainty and absence of leverage products in the market kept the local investors on the sidelines. On the other hand, foreign investors remained active, as their share in the total market traded value stood at 28 percent compared to 13 percent.
He said that despite rising foreign activity, average daily volumes remained largely under pressure amid uncertainty over the budget and absence of leverage product replacing CFS Mk-II. The regional markets were in the positive zone on account of better than expected US economic data and higher commodity prices. JKSE, PSI, Shanghai SE, Sensex and KLSE were up by 8.5 percent, 5.8 percent, 4.6 percent, 3.3 percent and 3 percent respectively. The rally in the regional markets however, failed to act as a trigger for the local bourses.