Reduction in badla financing, the core problem hurting the sentiment of the market, further created havoc and Karachi Stock Exchange index, for the second consecutive session, suffered a decline of 1.6 percent on Tuesday. The KSE-100 index fell 117.78 points, or 1.58 percent, to 7319.77 from 7437.56. The volume rose to 137 million shares against 97 million shares.
The slide in the market continued and during the early session the index plummeted nearly 180 points to the 7258 intra-day low as the prevailing financing gap in the market continued to haunt the investors. Besides, market participants were also perturbed over the new COT mechanism, which came into vogue from Monday. It was also reported that meetings of the committees were being held, which were earlier formed to address the financing issues. A sharp depreciation in share values was seen.
PTCL, OGDC and PPL plunged 2.5 percent, 1.7 percent and 3.9 percent, respectively.
PSO and POL were also down Rs 5.60 and Rs 4.50, respectively. Anticipation of interest rate hike in the Treasury Bills auction this week also contributed to subdued investor sentiment. FFBL, NBP and CTTL were the lone gainers posting increases of Rs 0.10, Rs 0.50 and Rs 0.45, respectively. In the present lacklustre market situation traders advised investors to remain on the sidelines.
Hasnain Asghar from Aziz Fidahusein said that the weak holdings that missed the badla financing on Monday, as the COT market was only available for seven-eight seconds, came in the main stream on opening.
The huge adjustment made the fundamentally strong speculative stocks more attractive and institutional support was witnessed on dips. Issues relating to non-availability of avenues for leverage continued to force a cautious approach for the fresh funds.
Technically, since the index failed to find support around 7377-7383, next major support stays at 7230-7237 while overhead resistance stays at 7370-7377. It is, therefore, recommended to wait for adjustment for placement.
Whispers of good word for badla in the report to be presented by the task force formed by advisor to the PM or any new mechanism such as REPO can invite speculative activity which, in turn, would invite healthy turnover.
Javaid Moon from Akbarally Cassim said that huge selling was witnessed from weak holders and some speculators because of no limit of amount in COT. People were waiting for any positive signals in the coming days from the SECP. "We expect any good solution would come in upcoming days on this major issue."
There was no activity in DGK Cement and Hubco at COT counter as the scrips were trading at upper lock. The badla decrease by Rs 50 million. There was badla increase by 0.65 million shares in NBP while decline was witnessed in DGK Cement and PTCL. "We expect the badla volume would slowly and easily switch in to margin finance but would see some ups and downs in COT figures in coming days."
PTCL lost 40 paisa to Rs 62.10 on business of 30 million shares. OGDC moved down to Rs 104.10 from Rs 105.85 on turnover of 24 million shares.
Fauji Fertiliser Bin Qasim rose 10 paisa to Rs 29.70 on deals of 15 million shares; NBP gained 50 paisa to Rs 107.50 on trading of 14 million shares; and PPL moved down to Rs 180.25 from Rs 187.50 as around 6 million shares changed hands.