Negative rumours, injected by vested interests, shoved all gains made during the early session on Monday, resulting in massive erosion in the trend-setter of the market and other heavyweights on Karachi Stock Exchange. The market caved in on the back of negative rumours in PTCL with the KSE-100 index declining 103 points to 7315 points level.
PTCL posted Rs 2.60 net decline on rumours that Etisalat had sought extension for making final payment for the acquisition of the telecom giant.
The absence of any further development with respect to the financing issues confronting the market also resulted in lacklustre investor sentiment. The index failed to sustain the 7482 points intra-day high and at one point made 7280 intra-day low, portraying a total decline at 202 points. Once again, crossing the 7500-point level proved formidable.
The market had started off positively on the back of privatisation developments in PSO and PPL. Nonetheless, overall PSO and PPL respectively declined 1.0 percent and 1.4 percent.
OGDC and POL also decreased Rs 1.85 and Rs 2.95 respectively. Losers beat gainers by a margin of almost 2 to 1. Volumes remained healthy at 283 million shares. FFBL lost Rs 0.40 and NBP and BoP were down 1.5 percent and 1.4 percent respectively, while Askari Bank closed marginally higher with its 1H/FY05 results announcement scheduled to take place on Wednesday.
An analyst from Atlas Investment Bank said that the downward trend in PTCL flew into other scrips in the market, particularly OGDC which contributed 32 points to the fall. Volumes remained low but stable at 194 million shares, which indicated lack of confidence on the back of the rumour mill.
PPL was also on the downturn as the announcement of it losing $52,000 per day from its offshore operations was not digested well by the investors. At the same time, it was expected that since the seas are rough, PPL would not be able to remove its oil rig until the monsoons are over and that would have to wait for a few weeks causing losses to PPL. In all, 91 companies closed in the positive with 176 closing negative.
The upsurge in the market was on the murmurs that COT extension would be allowed by SECP by way of an increase in the capped amount to 25 billion rupees from Rs 12 billion.
The upward trend in the market from early bell, according to an analyst at First Capital Securities, saw what could be termed as 'cultured selling' in core pivotals, since subtle trading in those stocks kept many punters, jobbers and investors on the purchase side while selling was witnessed by those who bought blue chip stocks at lower levels.
"Benchmark 100, without any doubt, offers some excellent bargain for shoppers, but extreme volatility and rumour-mongering has made it dicey and risky. So, any entry should be made with absolute caution along with profit margin and stop loss in mind."
PTCL lost Rs 2.6 to Rs 62.20 on a volume of 68 million shares. Fauji Fertiliser Bin Qasim fell 40 paisa to Rs 30.90 on trading of 19 million shares. NBP moved down to Rs 107.10 from Rs 108.75 on turnover of 18 million shares, OGDC declined by Rs 1.85 to Rs 104.05 on business of 17 million shares; and D G Khan Cement dropped by 60 paisa to Rs 56.40 as around 8.9 million shares changed hands.
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