The share market failed to respond following the acceptance of proposals of the Karachi Stock Exchange (KSE) on badla financing, and the index received fresh jolt of 281 points on Tuesday. The KSE-100 index fell 281.49 points, 3.89 percent, to 6952.72 as compared with 7234.21. The volume fell to 179 million shares as against 311 million shares. The market capitalisation dropped to Rs 1.969 billion from Rs 2.044 billion.
Tanvir Abid, head of research at Live Securities, said that turmoil related to the phasing out of badla financing continued as well.
According to a report, the KSE board meeting was held on last Monday evening in which it was decided that once again the SEC should be requested to extend the phasing out of carryover transactions. A revised schedule for the extended phaseout of badla was posted on the KSE web-site in the morning, he added.
He said the same old story was seen with one stock after another plunging to its lower circuit level. Clarification regarding the regulatory modalities is extremely essential in order to enable the market to determine its future direction.
Hasnain Asghar from Aziz Fidahusein, said the bulls in their desperate attempt to invite thrill in the market on the news that extension in COT has been granted by the SEC (with conditions attached) forced the index to recover from 80 points negative to 70 points positive. Inability of the movement to invite buyers, however, resulted in fresh selling. The change in investment strategy was finally noticed as even the stocks having the privatisation temptation failed to invite buyers. It seems the managers are now looking at a multiple of 7-8 for fresh placements. It is, therefore, recommended to opt for selling on strength. Positive news on privatisation of PTCL and PSO can, however, invite trading opportunities. Technically, the index would continue to find support around 6750-6757, while overhead resistance stays around 7210-7217.
Jawad Haleem research analyst from Atlas Investment Bank, said that the start was negative as investors queued in the pre-open session to sell their positions as quickly as they could. Consequently, the market went down drastically. After a while the market turned into the green zone as the rumour spread in the market about the extension in COT schedule. Afterwards, the market came under adverse pressure as most blue chip items tumbled down, and touched their lower limits. Losers outnumbered the gainers with 258 companies in the minus column, while just 56 scrips managed to close above previous close.
PTCL lost Rs 3 to Rs 57.25 on a business of 50 million shares, OGDC moved up to Rs 92.70 from Rs 92.55 on a turnover of 13 million shares, NBP slipped to Rs 95.85 down from Rs 100.85 on a trading of 10 million shares Sui Northern Gas suffered a decline of Rs 2.80 to Rs 53.20 on deals of 10 million shares, Pakistan Oilfields showed a drop of Rs 14.40 to Rs 273.85 on a transaction of 9.9 million shares.