KARACHI: Stocks fell for the fourth straight day on Wednesday with the KSE-100 index down 130.55 points or 0.40 per cent to close at 32,599.

Thin volume at 135.6 million shares, about the same as the previous day against the month-to-date average of 175m shares betrayed investors’ lack of interest in trading ahead of the budget.

The market opened weak as sentiments were dented on the passing of Gas Infrastructure Development Cess (GIDC) Bill by National Assembly on Tuesday. Investors worried that the implementation of GIDC could impact those companies which were not accruing the levy in their books.

“Moreover, confusion related to impositions of GIDC on new fertiliser plants, like Fatima Fertiliser, affected sentiments. Fatima slipped 4.9pc,” said a market participant.

Foreign investors picked up value stocks at dips with net inflow of $2.78m on Wednesday, much of the funds going into chemicals and oil and gas sectors. A major reason for the incessant market fall was the continuous selling by mutual funds as hedge against their ‘Capital Protected Funds’.

Including the heavy sale of $10.39m on Wednesday, mutual funds were noted to have offloaded stocks worth $52.6m since May 8. Banks and individuals absorbed mutual funds’ sell-off with net buy of $7.43m and $4.22m, respectively on Wednesday.

Market participants said that investors also avoided taking fresh positions until the announcement of the Monetary Policy statement expected on May 23, for the next two months.

“As inflation reading for April 2015 stood at 2.1pc taking over-all inflation to 4.8pc in 10MFY15 due to falling international oil prices, the market expects reduction in policy rates by 50bps,” said a dealer.

Published in Dawn, May 21th, 2015

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