Since political uncertainty continued amid strong protests of political parties and legal fraternity against the suspension of Chief Justice of Pakistan (CJ) in length and breadth of the country, the share market failed to come out of the downslide, and lost anther 5 percent, during the outgoing week.
It was the second continuous week of declines on the market, which witnessed colossal losses with blue chips appearing the hard-hit items. The most worst aspect of the ongoing state of affairs was the drastic fall in turnover which the brokers and analysts termed dangerous for the market. According to them, constant decline in the volume means investor is gradually moving out of the market being disappointed by the scenario emerging after the government move against the CJ.
During the week under review, the LSE index showed a wide-raging downward fluctuation, losing 245.06 points (5.40 percent) to 4,290.77 from 4,535.83 points. Turnover lowered to 14.069 million shares from 19.785 million, depicting a decline of 5.716 million shares (29 percent). According to some analysts, the market now could take a technical turn in the coming week because of its highly oversold position.
Dark shadows, caused by multiple negative news concerning PSO privatisation and resignation of a high court judge, gripped the market, which shed 2.87 percent, closing below 4,5,00 mark, on first day of the week under review. Sentiment was positive in the morning and till 10:30 am, the market moved in green zone, but later reports regarding PSO privatisation and resignations of a high court judge and lower courts judicial officers caused panic.
Subsequently, pressure gripped the market and it, with a loss of 130.32 points closed at 4,405.51 points as against 4,535.83 of the preceding session. Turnover retreated to 18.919 million shares from 19.785 million shares. On the basis of negative reports of regarding its sell-off, PSO underwent heavy battering followed by Pakistan Oilfields and exploration joint PPL.UBL and Saudi Pak Commercial Bank resisted pressure and added fresh gains to their worth.
But main banking stocks, including MCB and National Bank showed negative vibes. There was no change in the trend on second day, but volume ascended on account of fresh institutional buying in banking sector. However, the LSE index showed a decline of over 100 points, which, according to analysts was due to inefficiency of the MIS department, which failed to update data after expiry of spot status of banking shares.
The LSE-25 index was calculated with a loss of 100.25 points closing at 4,305.26 against 4,405.51. Turnover increased to 23.839 million shares from 18.919 million. MCB Bank, National Bank, Bank Alfalah, Askari Commercial Bank, of Punjab, PPL and Pak Oilfields helped the market stay in positive zone.
As result of political parties and lawyers countrywide protest calls, the share market showed an uneven movement and ended with a marginal decline, amid sluggish trade activity, on the third day. The LSE-25 index finished the session with 18.39 points loss at 4,286.87 as compared to 4,305.26 points. Volume, however, depicted upward movement, reaching 27.998 million shares from 23.839 million of the preceding session. The market maintained its overnight upward thrust, but following news of protests came under pressure, with the index moving down sharply.
Later, recovery took place and the market regained strength to close with only a marginal loss. The low prices of the scrips were a driving force behind growing interest from the investors. Adamjee Insurance and Kohat Cement were the key gainers of the day while UBL and Engro Chemical were quoted major recipient of losses. In early hours people witnessed a good trading and the index, at one stage, shot up by over 100 points at midday on news of protests, the sentiment started weakening and the index entered the minus column, with a net loss of 80-90 points.
However, due to last minutes recovery, losses were limited. Activity was again range-bound activity on last trading day of the week due to indifferent attitude of the players, who preferred staying at distance. The LSE-25 index ended at 4,290.77 points as against 4,286.87, registering a fractional improvement of 3.90 points. Turnover was very low and was marked at 14.069 million shares versus 27.998 million of the preceding session, showing a fall of 13.929 million shares. The market was closed on Friday on account of Pakistan Day.
Political uncertainty has disturbed the sentiment and people are nervous anticipating a worsening situation of law and order in the country, analysts said. The SECP move to send fresh notices to brokers alleging them responsible for March 2005 crisis and the farmer's decision to challenging the allegations in court are also negative factors that could disturb the market internally, an analyst said. If it happens it could further dampen the sentiment, he viewed. The only positive news pertains to the PSO privatisation, which according to the government, will take place as per schedule on May 5, 2007.