Share prices showed erratic movement on Karachi Stock Exchange on Monday and profit taking forced the index to close on a negative note with volume appreciating by 6 percent. The KSE-100 index declined by 95.83 points, or 1.29 points, to 7315.50 from 7411.33 of Friday. The turnover rose to 304 million shares, including business at futures, counter from 287 million shares. The market opened on a positive note but selling pressure in oil, gas and banking units created panic among small investors, increasing tally of losses. The index made an intra-day high of 60 points and low of 186 points on rumours that the central bank might increase discount rate, and bidding date for PTCL, set for June 10, might be extended.
Hasnain Asghar from Aziz Fidahusein said that the zig zag motion continued as the day opened with rumour of slight adjustment in PTCL bidding date, likely increase in interest rates and political developments, and absence of buyers increased the inflow and selling pressure was witnessed at all counters.
Technically, the ability of index to close within the support region of 7310-7325 would allow the index to invite consolidation while overhead resistance stays at 7450-7457. It is, however, recommended to focus on volume leaders, particularly the privatisation beneficiaries.
Tanvir Abid, head of research at Live Securities, said that the market remained lacklustre on account of a number of factors. These included expected further rise in discount rate, uncertainties related to the forthcoming budget, reservations on the political front with some tussle being seen in the ruling party, and the generally overbought situation.
Two power houses of the index, OGDC and PPL, declined sharply along with the correction staged in D G Khan Cement, Lucky Cement, MCB, Sui Northern Gas and Fauji Fertiliser Bin Qasim. "Going forward, we suggest overall cautious stance, and advise gradual accumulation in PTCL, OGDC, PSO and Pakistan Oilfields."
PTCL moved up to Rs 72.45 from Rs 70.90 on turnover of 130 million shares. OGDC lost Rs 1.85 to Rs 99.45 on trading of 35 million shares. PSO suffered a decline of Rs 7.10 to Rs 373.90 on transactions of 14.34 million shares, while NBP denoted an increase of 35 paisa to Rs 96.25 on deals of 14.3 million shares, and PPL slipped to Rs 177.95 from Rs 185.75 as around 8.9 million shares changed hands.
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