Karachi stocks lost ground Tuesday weighed by spiralling crude oil slump on the international market. The day saw United Arab Emirates, a big contributor to Organisation of Petroleum Exporting Countries (Opec), putting its weight behind the group by refusing to curtail supplies. The persisting downtrend in world oil prices took its toll on the country's main bourse that is dominated by index heavyweights from oil and gas sector.
Having started the day with 11-point decrease, the KSE 100-share index contracted to 33,371.29 points, losing 47 points after hitting 33,418.20 points intra-day high and a historic level the benchmark index had hit a day earlier. The intra-day low was 33,167.96 points. The bearish activity, analysts believe, was caused by the oil exploration firms put 'under pressure' by a record slump in global crude oil prices. The OGDC, POL and PPL were cited as major losers, each falling over two percent.
"The index heavyweight oil exploration companies remained under pressure after decline in international oil prices," Samar Iqbal, vice president of equity sales at Topline Securities said. Ahsan Mehanti, a director at Arif Habib Corp, said institutional selling in oil stocks lowered the stocks after WTI crude dropped below $45 per barrel. The turnover at the ready-counter was recorded at 279 million shares, 11 percent higher than Monday's 250 million. The value appreciated five percent to Rs 13.2 billion compared to Rs 12.5 billion of the previous session. The day's trading saw 400 scrips changing hands, of which 222 went up, 157 went down and that of 21 remained unchanged.
The market capital slightly shrank by Rs 3 billion to Rs 7.64 trillion. Pakistan Elektron emerged volume leader on 20.6 million shares, each gaining Rs 1.42 to close at Rs 49.52. Turnover for other nine best performing stocks, including PIA, Pakistan Intl Bulk Terminal, Pervez Ahmed, Aisha Steel, Lotte Chemical, Maple Leaf Cement, Fauji Cement, Jehangir Siddiqui Company and Engro Foods stood at 15 million, 14.9 million, 12.7 million, 10.5 million, 10.3 million, 1.2 million, 9.7 million, 7.43 million and 7.40 million shares, respectively.
On the futures market, the trading volume settled in the green zone moving up to 32 million from 21.6 million a day earlier. Amid speculations for a possible 50-100 basis points policy rate cut by the State Bank on Thursday (January 15), late session interest in cement and textile stocks supported the index to close above the session lows, Mehanti said. Samar saw renewed interest in the auto sector following encouraging auto sales during the first half of the current fiscal year (FY15).
"Steel sector also kept on rallying after the government imposed regulatory duty on the import of steel products," analyst said. Mehanti, however, opined that these and other positives, like a record remittances data ($9 billion) for July-DecFY15, an upbeat data on car sales and the Prime Minister's meeting with US Secretary of State John Kerry and the latter's pledge to support Pakistan, failed to impact the sentiment of the risk-averse equity investors at the KSE.
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