Bearish trend returned to the Lahore Stock Exchange (LSE) where equities eroded values mainly on account of profit taking and lacking buying interest on the part of investors, amid selling pressure on Tuesday.
The LSE-25 index registered a decline of 23.62 points, closing at 2958.04 against 2981.66 of Monday, while transaction volume increased to 127.929 million shares as compared to 105.05 million shares traded a day earlier.
Bank of Punjab (BoP), Lucky Cement, OGDC, Maple Leaf Cement, D.G. Khan Cement, and Adamjee Insurance helped market resist more declines, while profit taking in PSO, National Bank of Pakistan (NBP), Hub Power, MCB and Chakwal Cement led the equities to minus column.
The market opened on a healthy note but could not sustain due to selling pressure. During the day, market despite moving up and down, finally closed in negative zone.
It was seemed that market was totally lacking confidence due to its performance during last two-three sessions. The investors, soon after resumption of trading, started offloading their holdings in order to avert 4-day Badla charges.
It would be a long weekend and every one wanted to secure their position, said Ahmad Nabeel of Invest and Finance Securities, while commenting on the market trend.
PSO disturbed the sentiments, as it failed to come up to the investors' expectations who were disappointed over the announcement of Rs 3 dividend. Similarly, PSO's quarterly earning per share at Rs 5 was also below their expectations.
The announcement generated a selling pressure which led the other equities downward, he added. It was OGDC, which provided support to the index, as after registering a gain of Rs 1.70 it contributed support of 75-80 points, otherwise the market could have suffer more losses, he maintained. He was of the view that investors should adopt 'sell on strength' policy and avoid fresh buying till the third week of May.
The month of May usually create problems in the stocks business every year, he added.
FFC, OGDC and PTCL can play pivotal role in strengthening the stock market. Investors are optimistic and anticipating Rs 1.25-1.30 dividend from FFC and PTCL for the current quarter, while they expect OGDC payout of Rs 1.00-1.50.
In case, these companies perform below expectations, the market could suffer downward sessions in coming days. Energy and sugar sectors are expected to attract investors for fresh buying in next couple of weeks, he added.
Declining stocks were ahead of advancing ones, as out of total of 85 active issues, 15 moved up, 28 went down, while 42 stayed glued to it's previous levels.
BoP gained Rs 3.90, Lucky Cement improved by Rs 2.65, while FFC and OGDC were up by Rs 2.00 and Rs 1.70, respectively. PSO declined by Rs 5.25, National Bank lost Rs 1.90, while Hub Power and PICIC were down by Rs 1.60 and Rs 1.50, respectively.
OGDC was the market leader whose 32.998 million shares changed hands, followed by Band of Punjab with total transaction of 14.320 million shares.