The share market closed on a negative note on Wednesday as companies in the oil sector depicted downtrend due to domestic oil prices remaining unchanged. The KSE-100 index showed a decline of 7.29 points, or 0.13 percent, to 5560.50 as compared with 5567.79 of Tuesday. The volume fell to 197 million shares, against 256 million shares.
The market showed fresh pruning under the lead of fuel sector where shares of Shell Pakistan, Pakistan State Oil, Pakistan Oilfields and Attock Refinery declined sharply.
The main factor behind this decline was the Oil Companies Advisory Committee's decision to keep oil products prices unchanged for a fortnight starting December 1.
Traders and dealers were expecting an increase of as much as 2.5 percent in oil prices, but the government, to give further relief to consumers and curbing inflation, decided to freeze oil prices at current levels till December 15.
Hasnain Asghar form Aziz Fidahusein said that the decision of the government not to increase the rates of petroleum products invited offloading in the mostly likely beneficiaries of the rate increase, Pakistan State Oil and Pakistan Oilfields. Offloading soon spilled to other main stocks.
Technically, the index will continue to find support around 5533-5537 while the overhead resistance stays around 5603-5610. Although improving fundamentals suggest further surged, the dull and low volume session indicated a mild adjustment.
Tariq Hussain Khan, manager research from Live Securities, said that the market failed to capitalise its positive pattern as punters and small investors arrived with heavy selling orders. Low volumes expressed investors' lack of interest on the commencement of last month of 2004.
"We hold the view that this correction would provide further stability to the market. However, we expect that the market would once again start its positive journey after a mild profit-taking in the coming days," he said.
However, rising trend in COT may create uncertainty as it touches its highest level, he added.
The badla increased by 40 million rupees. There was badla reduction in Hubco as delivery-based buying was witnessed on the basis of attractive dividend yields. The badla levels are near all-time highs and this is impacting the market sentiment.
The badla rates fell to single digit as ample liquidity and falling money rates reduced the badla rates.
Askari Bank rose Rs 1.50 to Rs 92.90 on a volume of 22.499 million shares; Sui Northern Gas lost 40 paisa to Rs 56.25 on trading of 14.333 million shares; Bank of Punjab gained 45 paisa to Rs 62.40 on turnover of 13.005 million shares; D G Khan Cement gained five paisa to Rs 52 on deals of 12.529 million shares; and PIAC rose 55 paisa to Rs 12.75 on business of 10.563 million shares.