Bears take control

Bears dominated the Thursday's proceedings because of what analysts said downward trend in global equities and international crude oil prices. The KSE-100 index shed 286 points, or 0.87 percent, to close at 32,682.50 from 32,968.26, which proved to be the intraday high. Though ending upward, the trade volume remained thin at 136 million shares compared to Wednesday's 100 million. The value of stocks traded appreciated to Rs 9.14 billion from Rs 6.94 billion of last session. Of the 337 issues traded, only 86 advanced, 236 declined while 15 stayed unchanged.
With market cap contracting to Rs 6.91 trillion, the foreign portfolio investment ended the day in negative; net selling of $6.58 million. Corporate institutional investors made a net selling of $6.5 million, overseas Pakistanis $78,684 and individuals $2,319. Southern Electric led volumes with 9.2 million trading but was priced down to Rs 2.51 at close. Other best performers were TRG Pakistan, Pak Elektron, Dewan Cement, PIBT, Amtex Limited, Dolmen City REIT, JSCL, Pakistan Petroleum and DG Khan Cement.
Futures trade accumulated to 19.7 million contracts as against 17 million a day earlier. Ahsan Mehanti of Arif Habib Corp said the stocks closed bearish after global equities sell-off and slump in US crude prices that lowered to 12-year low of $32 a barrel. "Trade remained thin amid support in defensive stocks on speculations ahead of year end result announcements," the analyst said.
Worries for geopolitical tensions, rising circular debt in the energy sector and uncertainty over government's privatisation plans played a catalyst role in bearish close. Muhammad Rizwan, head of sales at Topline Securities, said declining crude rates coupled with China's devaluation of Yuan which rattled equity markets world over. "The local bourse was no different," he said. The oil price rout, he said, trimmed oil giants like OGDC, PPL and POL by 3.8 to 5 percent.
Fertiliser stocks like EFERT, FFC and FATIMA declined 0.6 to 1.2 percent on the back of what analyst said five percent decrease to $228 per ton in urea prices. Investors expected that urea producers would not be able to maintain their margins, Rizwan viewed. "The share market was dominated by stocks of pharmaceutical company on the back of expectation of improved sales and earnings going forward," he said. FEROZ closed up five and SEARL 4.9 percent.