The Karachi share market on Tuesday opened on a positive note and the KSE-100 index hit the 13,633.18 points intra-day high on the back of increase in oil prices in the international market. But later technical correction set in and it could not sustain that level, closing at 13,494.83 points, with a loss of 72.57 points.
KSE-30 index also lost 96.84 points, closing at 16,809.64 points level. The market witnessed improved trading and the ready market volume increased to 272.729 million shares from 257.274 million shares traded a day earlier. The futures market turnover, however, declined to 41.085 million shares against 47.206 million shares.
Market capitalisation declined by Rs 16 billion to Rs 3.911 trillion. Trading took place in 418 scrips, out of which 205 scrips closed in negative column and 176 scrips closed in positive column while the value 37 scrips remained unchanged.
Arif Habib Securities was the star performer with 13.994 million shares and surged by Rs 2.40 to close at Rs 124.40. It was followed by Nishat Mills, which gained Rs 2.40 to close at Rs 128.40 with a volume of 12.221 million shares.
The banking sector performed well and JS Bank Limited and PICIC Bank increased by Rs 1.00 and Rs 1.90 to close at Rs 19.15 and Rs 40.25 respectively. However, BoP lost Rs 0.50 to close at Rs 115.50.
Profit taking was witnessed in E&P sector. As a result, OGDC and PPL lost Rs 0.95 and Rs 0.75 to close at Rs 121.40 and Rs 264.75 respectively. Callmate Telips gained Rs 2.60 to close at Rs 55.30, while Dewan Cement surged by Rs 0.70 to close at Rs 17.10.
Jangir Siddiqui Co and Sanofi-Aventis were the highest gainers which gained Rs 18.60 and Rs 17.00 to close at Rs 391.35 and Rs 357.30 respectively, while Nestle Pakistan and National Refinery were the highest losers which lost Rs 70.00 and Rs 12.30 to close at Rs 1430.00 and Rs 330.70 respectively.
Ahsan Mehanti at Shehzad Chamdia Securities said that technical correction was witnessed in almost all blue chips as the market was in an overbought position. The PSO's pre-bid meeting and hearing of the case created uncertainty among the investors. The imposition of capital gains tax (CGT) on banking sector and 35 percent GCT on CFS earning also created selling pressure. Selling pressure was also witnessed in oil, banking and cement sectors. The rising oil prices supported the index at initial levels, it could not sustain due to selling pressure in late hours.
Hasnain Asghar Ali at Aziz Fidahusein Securities said that comments by US officials regarding political scenario in the country pushed the 'Lions to their Den', while 'mice were seen active' in low-priced stocks, mainly belonging to banking and telecom sector.
Although, looking at recent past, it has been strongly proved that the local bourses are not likely to react to political activities, both local and foreign buyers are, however, focused on the policy makers, and the strength of those who have led to the robust turnaround in the economy. Reduction in their strength or their inability to introduce or continue the current policies can, however, have an impact.
As it was witnessed in Tuesday's session, the nervousness increased due to rumours on political grounds. Adding to the misery of the market men was the capped T+3 leverage tool, dull activity and growing financing heat, therefore, forced the CFS holdings to melt.
The float, therefore, swept along with it 150 precious points. The record making spree, however, continued as the day witnessed historic high of 13,633. Unfortunately, the index failed to close above the immediate resistance of 13,550-13,557. Technically, therefore, the index needs a thorough consolidation, which is unlikely without an adjustment, as immediate support stays at 13,270-13,277.
The under-performed oil & gas exploration stocks, having a decent weight in KSE-100 index, can support the index in attaining the uphill task (ie consolidation without correction). With support from rising oil prices in the international market and upcoming petroleum policy, the sector is trying hard to join the bull-run.
Unfortunately, the tool that would allow the incoming float in the high float stocks to digest is currently unavailable. Management take-over stories in the low-priced stocks may, however, keep alive the interest in the local bourses, while a sector shift, that had been witnessed in the session, is likely to continue. Stagnant session with range-bound activities will certainly increase the nervousness. It is, therefore, recommended to opt for offloading on strength, incase of low volume surge.