Volatility prevailed on the Karachi share market Tuesday and the benchmark KSE-100 index closed at 34,032 points, down 152 points weighed mainly by concerns on weak earnings outlook. Ahsan Mehanti, an analyst at Arif Habib said stocks closed lower amid pressure as bullish rally eased in global markets and renewed concerns for rising circular debt in the energy sector.
"Investors concerns on weak earnings outlook in oil, banking and fertilisers sector amid volatile global commodities played a catalytic role in bearish sentiment at KSE ignoring record remittances data of over $4.96bn and upbeat auto sales data for Jul-Sep'15," he added.
During the intraday trading, the market moved in the green and red zone touching 34,279 points highest and 34,010 points lowest level. However, trading activity at the ready counter was higher than previous session as overall some 239 million shares were traded Tuesday compared with 169 million Monday. The market capitalisation decreased by some Rs 28 billion to Rs 7.271 trillion. With an increase of 10 percent, the daily trading value increased to Rs 10.8 billion.
Trading took place in 394 companies, of which 144 closed in green zone, 223 in the red, while share prices of 27 companies remained unchanged. Among top 10 active scrips, Pace Pak Ltd, Pak ElektronXD, TRG Pak Ltd, Lotte Chemical and Jah. Sidd. Co were volume leaders with 40 million, 21 million, 18 million, 11.86 million and 11.85 million shares, respectively.
Ahmed Saeed Khan at JS said volatility prevailed in Tuesday's session followed by a glut of crude oil pushing international prices down to trade around $46.80 mark. Therefore, the E&P sector remained under pressure, forcing the index to remain in the red zone. The index throughout the day juggled between +96 points and -174 points to close the index 0.44 percent down, he added.
"Negativity can be attributed majorly to E&P sector along with cement and fertiliser sector. News of LUCK expanding in the North gives rise to speculation that other major players will do the same, which can eventually lead to the big players to get into a price war to capture the market share, although this speculation will become valid as and when these expansions come on line which would take another 2-3 years," he added.
Biggest laggards of the sector were, CHCC (-1.13 percent) and LUCK (-1.03 percent). Confusion still prevails over the pricing of fertilisers per bag, therefore pressure was seen on the sector overall.
Mohammad Rizwan, Vice President Topline Securities, said due to more than 5 percent correction in international oil prices some profit-taking was seen in local oil stocks like OGDC, PPL and POL 2.52 percent, 2.45 percent and 1.60 percent, respectively. Some support was witnessed in banking stocks on the back of improved upcoming quarterly results. HBL and MCB were up by 0.88 to 2.16 percent, he added. During the secession, EFOODS remained in the limelight on expectations of good quarterly result which helped the stocks gain 2.32 percent.
Colgate PalmoliveXD and Island textile were the top gainers with Rs 50.00 and Rs 45.51 to close at Rs 1,350.00 and Rs 963.00, respectively. Unilever Foods and Sanofi-Aventis were the top losers with Rs 200.00 and Rs 20.00 to close at Rs 6,800.00 and Rs 605.00, respectively.
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