The local share market remained dull during the last week, as most of the players did not indulge in fresh activity, ahead of the upcoming budget, fearing levy of new taxes on stock business, besides prevailing political uncertainty after the conflicting reports regarding holding of the next general elections in the country.
The opening of the week was positive and there was somehow improvement in activity, but the market moved roller coaster because of budget-related rumours and statements issued by the government circles about the next general elections. According to brokers, the market movement mainly depended on the oil and gas sector, banks and cements, which proved as trend-setters.
According to stock analysts, equities moved back and forth and failed to take a clear turn which disturbed the players and they preferred to stay at distance.
The market is behaving roughly and its tone is volatile where it is hard to ascertain its future direction, therefore, it is safe to be on sidelines till the announcement of the budget, a broker said.
The LSE-25 index witnessed a downward fluctuation of 121.68 points or 2.25 percent, declining to 5274.28 points from 5395.96, during the week under review. Similarly overall turnover descended to 45.192 million shares from 63.803 million shares, depicting a fall of 18.611 million shares or 29.16-percent.
Late buying in oil & gas sector and partially in banking stocks, took the share market in upward direction on first day of the last week, where the index posted a net rise of 0.8-percent with a decline in transaction volume. The LSE-25 index closed at 5440.66 points versus its previous closing of 5395.96, showing an increment of 44.70 points. Volume retreated to 47.530 million shares from 63.803 million, registering a decline of 16.273 million shares.
The sentiment was bullish when trading resumed in the morning, but after some time it turned highly volatile and moved up and down most of time. In last minutes, a sudden buying interests in PSO and then in PTCL changed the market sentiment, placing the index in positive zone.
The trend was also followed by OGDC and PPL, which provided further strength to the sentiment. PSO appeared as star performer and buying in it also spurred investors to pick other oil & gas sector shares. Equities moved both ways on the second day on Tuesday, but finally settled in negative zone amid ascending transaction volume, on account of selling pressure in the oil sector.
The LSE-25 index fell down by 148.40 points closing at 5292.26 against 5440.66. Turnover increased to 63.642 million shares as compared to 47.530 million shares. Massive selling was seen in PPL, PSO, Pak Oil Fields and OGDC while Union Bank, Sui Southern and Maple Leaf Cement resisted the pressure and closed in positive zone. The market, which opened on mixed sentiments could not sustain and sharply declined during last trading hours.
The local share market again depicted an erratic movement on Wednesday, with equities remaining highly volatile amid various rumours, which kept the investors in a very confusing position.
The LSE-25 index ended at 5309.85 points compared with 5292.26, registering a marginal increment of 17.59 points. Volume also descended to 46.643 million shares from 63.642 million, denoting a decline of 16.998 million shares. Both-way movement of the market disappointed the investors and they appeared indecisive because of uncertain tone of equities.
There was no change in overnight trend of the market on Thursday, as uncertainty continued to mar activity amid high volatility, which kept most of the players out of the run. The LSE-25 index fell to 5294.78 points from 5309.85, showing a slight decline of 15.07 points. Volume was almost static to its previous level at 46.235 million shares compared with 46.643 million.
The situation was not much bad in the morning, as the market behaved positively, but later turned erratic. Activity was restricted to a few selective chips, due to which, volume stayed almost steady. The market attitude was quite abnormal due to rumours and unconfirmed reports coming from the political side. Activity was seen in Engro Chemical and some petroleum and cement sectors shares in late hours, which provided some relief to the market.
There was also no change in the range-bound trend on last day of the week, and equities kept moving in a roller-coaster position, even ignoring some positive news from the economic front. The LSE-25 index ended at 5274.28 points as compared to 5294.78, depicting a decline of 20.50 points. Volume was down to 45.192 million shares from 46.235 million, showing a slight decrease of 1.042 million shares.
The market moved both ways and remained directionless due to declining buying interest after investors' disinterest. It took a positive start and soon the index went up to 50-point and then started declining. However, before close of the pre-prayer session it recovered. In last minutes of the second session, the market again behaved roughly and there was hardly any change in the trend when trading resumed after the Juma prayers, which dampen the sentiment.
Various rumours concerning budget, political unrest and closure of wells of OGDC and PPL also caused confusion among the investors; and they thought it appropriate to go outside. This sort of behaviour decreased the volume, which was remained far below the mark, in the week under review.
However, according to analysts, budget related news reports were the prime factor for the persisting lacklustre. Conflicting news regarding revision of duty on cars in the budget and Morgan Stanley move to lower the weightage of the companies in their respective indices were the other factors keeping the sentiment depressed. Most of the analysts believed that the market would continue moving roughly till the federal budget for 2006-097 is announced and the prevailing confusion relating to taxation is over.