The Karachi share market witnessed heavy selling pressure on Friday and the KSE-100 index lost 98.89 points to close at 12,353.19 points level due to roll over week pressure and investor concern over political uncertainty and unrest in northern parts of the country.
The declining trend in other regional markets also affected the sentiment negatively. The KSE-30 index declined by 134.16 points to settle at 14,459.14 points. The market started on a negative note and many scrips reached their lower lock level. Trading activity remained thin as the ready market volume declined by around 80 percent to hit the second lowest level in last six years at 29.682 million shares as compared to 146.357 million shares traded a day earlier.
Futures market turnover decreased by 63 percent to 21.073 million shares against 56.492 million shares on Thursday. The market participants blamed the downside cap of one percent as the reason for low volume as they feel that prospective buyers would have digested float of the stuck-ups in June forward at further discounted rates.
The overall market capitalisation declined by Rs 26 billion to Rs 3.795 trillion. Trading took place in 284 scrips, of which 190 closed in negative, 66 scrips in positive while the value of 28 scrips remained unchanged. KESC was the star performer of the day with 3.042 million shares and gaining Rs 0.19 to close at Rs 5.24.
Selling pressure was witnessed in banking sector, as MCB Bank, BankIslami Pak and NIB Bank lost Rs 3.33, Rs 0.10 and Rs 0.11 to close at Rs 329.67, Rs 14.94 and Rs 11.48 with 2.861 million shares, 1.997 million shares and 1.066 million shares, respectively.
EFU General Insurance performed well and surged by Rs 9.09 to close at Rs 364.50 with 2.218 million shares. Arif Habib Sec declined by Rs 1.64 to close at Rs 163.11 with 1.193 million shares. OGDC lost Rs 1.26 to close at Rs 125.61 with 1.178 million shares. Jahangir Siddiqui Co decreased by Rs 5.40 to close at Rs 535.50 with 1.055 million shares.
Dominion Stock declined by Rs 0.06 to close at Rs 6.07 with 1.002 million shares. DG Khan Cement lost Rs 0.68 to close at Rs 67.81 with 0.853 million shares. Bata (Pak) and Ferozsons (Lab) were top gainers with Rs 75.00 and Rs 14.04 to close at Rs 825.00 and Rs 312.00 respectively while United Sugar and Siemens Pak were top losers with Rs 16.67 and Rs 14.20 to close at Rs 333.33 and Rs 1405.80, respectively.
Ahsan Mehanti at Shehzad Chamdia Securities said that the high discount rate, rollover week pressure and falling rupee value affected investor confidence negatively. The declining SCRA balances reflect foreign outflow.
Hasnain Asghar Ali at Aziz Fidahusein Securities said that buyers are unlikely to come in mainly in stocks having a high impact of political uncertainty and landslide adjustment of the economy. Group stocks and cash rich stocks least affected by the paradigm shift have the capacity of inviting buyers if the foreign inflow halts and positive news flow starts coming in. High trading cost on the other hand is restricting even the seasoned players to take chances for day trades.
The issue if addressed promptly can allow the local bourses to start generating turnover. It is however recommended to let the dust settle down for making fresh investments, as rupee stabilisation can be a parameter for restoring local confidence, trading options can however be exercised in the stocks having potential to report growth in upcoming results and offer cash dividends, as such announcements will certainly allow market a base to consolidate.