Bearish trend persisted on Karachi Stock Exchange for the third consecutive week ended on March 31, 2007 due to uncertainty on political front both at domestic and international levels. The rollover week for March contracts also created selling pressure on deliverable open positions.
The market could not perform well despite healthy inflow of foreign investment into the country. Rising oil prices in the international market, however, triggered fresh buying in the E&P sector.
The KSE-100 index posted a net decline of 23.39 points to close at 11,271.59 points level, while the free float market capitalisation-based KSE-30 index lost 140.89 points to close at 14,014.56 points level on week-on-week basis.
The market witnessed dull trading and the ready market average daily volume declined by 16.41 percent to 117 million shares as compared to 136 million shares traded during a week earlier. Market capitalisation stood at Rs 3.07 trillion on the end of the week.
Farhan Aziz, analyst at Jahangir Siddiqui Securities, said that with the end of the week, first quarter of 2007 concluded on healthy note, where Pakistan equities remained buoyant and benchmark KSE-100 index gained a handsome 12.3 percent year-to-date.
On the weekly basis, market remained dull and index declined by 0.2 percent as the investors were still wary due to political situation in the country. Besides, in last three weeks the index has eroded 1.4 percent.
Due to rising oil prices in the international market E&P sector stocks outperformed the broader market and gained 1.3 percent. Political situation in the Middle East lifted the oil prices in international market to a six month high level to $66 per barrel. The banking sector got some beating due to profit taking as it was rising for last three consecutive weeks.
Ahsan Mehanti, CEO of Shehzad Chamdia Securities, said that the main reasons for negative index were rising political crisis including Waziristan clashes, market witnessing post-December results correction, rollover week for March contracts creating selling pressure on deliverable open positions, writ of government challenged by madressah activists in Islamabad and regional issues affecting the market sentiment.
Jawad Haleem, analyst at Atlas Capital Markets, said that the market maintained dull momentum and the uncertainty at the political front and the gradually intensifying situation between Iran and England kept the market range-bound. On Monday the index closed at 11,301.62 points level, with a nominal gain of 6.64 points.
However, the market managed to close in the green on the back of fresh buying at low levels on Tuesday and the KSE-100 index gained 26.85 points to close at 11,328.47 points level. The market started on a positive note on Wednesday. However, it witnessed a dull session as the investors opted for cautious stance and the KSE-100 index lost 94.91 points to close at 11,233.56 points level. Bearish trend continued on Thursday and the KSE-100 index lost another 12.05 points to close at 11,221.51 points level.
The start of the market was positive on Friday and the KSE-100 index gained 50.08 points to close at 11,271.59 points as the E&P sector stocks outperformed due to increasing oil prices in the international market.