Share prices eroded massively on Lahore Stock Exchange (LSE) on Wednesday since the correction surfacing a few sessions earlier continued, but brokers said that uncertainty about the fate of President Pervez Musharraf played a pivotal role in triggering panic selling.
The LSE-25 index lost 118.15 points to reach 4,690.43 from 4,808.58 points of Tuesday. Volume came down to 38.213 million shares from past day's 42.936 million shares, registering a decline of 4.722 million shares. The market moved in minus zone from open to close of the session with both the index and the volume remaining on the lower edge.
Brokers said the awaited Supreme Court decision in petitions filed by two presidential candidates against President Musharraf challenging his candidature played a major role in creating panic selling in the market. There were across the board declines with all key scrips losing values significantly. Crescent Steel and Bank Alfalah were the main gainers while Packages and Adamjee Insurance were the major declining stocks.
A technical correction was due for the last one and half months as the market remained constantly in bullish state of mind, even ignoring a number of negative news, Mehdi Securities research head Athar Muhammad said. From September 7 to start of this week, the market had gained 2,500 points, which is a very healthy gain, he added.. "If we look at last one month's market performance, it gained around 1,600 points. Therefore, a correction was expected." However, now that the market has lightened its weight, shedding almost 700 points, it should consolidate at the existing level at least for a couple of weeks to tread uphill course, he added.
Although the uncertainty prevails on the political horizon, the long-term outlook of the market seems bullish. Even in case of any possible removal of President Musharraf, it might never face any major threat. In that case, it may plunge for a few sessions and then recover. If the market consolidates and then goes up, digesting the correction, one can expect sustainability in the trend. "If all remains well, I expect the market could add 4,000 points to its worth to reach the next targeted level of 18,000 points by first quarter of 2008," Ather said.
Of 124 traded scrips, 14 moved up, 59 lost their values while 51 were intact to their past levels. In positive zone, Crescent Steel gained Rs 4.30, Bank Alfalah Rs 2.75, Honda Atlas Card Rs 1.60, Nishat (Chunian) Rs 1.45 and Kot Addu Power Company Rs 0.90. In negative column, Packages Ltd shed Rs 24.35, Adamjee Insurance Rs 20.40, Mari Gas Company Rs 15.80, National Refinery Rs 15.75 and MCB Bank Rs 14.80. Arif Habib Securities led the market with 5.656 million shares, followed by NIB Bank with 4.376 million shares.