Bears on driving seat

Institutional profit-taking helped bears dominate Karachi stocks on Thursday as the KSE-100 index lost 68 points to close at 34,454.59. The trading turnover, however, improved to 200 million shares from 185 million of the previous day. The traded value also settled in the green at Rs 10.99 billion compared to 10.44 billion a day earlier. Of the 378 scrips which changed hands on the week's second last day 150 appreciated, 204 depreciated and 24 remained unchanged in value.
The market capital slid down to Rs 7.318 trillion and foreign investment showed some recovery to mark net buying of $407,951. Pak Elektron led volumes with 25 million trade each, however, declining to Rs 76.96 at the day's close. Other best performers included TRG Pakistan 17.7 million, JSCL 17 million, Pace Pakistan 16 million, KEL 11 million, Maple Leaf Cement 5.9 million, SSGC 4.7 million, Dewan Motors 4.4 million, Fauji Fertilizer Bin Qasim 4.0 million and Lalpir Power 3.6 million shares.
Futures trade dipped to 27.8 million contracts from 29.3 million of last session. "Stocks closed lower led by oil, cement and Fertilizer scrips amid institutional profit-taking in the post earnings season," said Ahsan Mehanti at Arif Habib Corp.
Sharp fall in global crude prices, weak earnings outlook on falling global commodities and concerns on reports of inconclusive Pak-IMF talks for the 9th Review under Extended Fund Facility played a catalyst role in the bearish sentiments in the overbought market, he added. Ahmed Saeed Khan of JS Research said flattish momentum prevailed in the day's session as investors stayed on the sideline ahead of the monetary policy slated to be unveiled later this month.
"Speculations grow about the monetary policy where there is no unanimous view on the interest rate cuts, both groups have equal support on their opposing arguments, resultantly the banking sector remained under pressure where the big five banks closed marginally in the red," the analyst said. Intraday decrease in global crude oil prices kept the index heavyweight energy scrips under pressure with the exception of APL and HASCOL which grew by 2.53 and 2.27 percent. "On the speculative rumor of an interest rate cut this month led the cement sector to be under pressure," Khan said. Moving forward, he said the market is expected to remain flattish unless it gets a major trigger.