KARACHI: The market turned bearish on Tuesday as the KSE-100 index plunged by 196.87 points (0.60 per cent) to 32,510.35.

The celebrations over the higher-than-expected discount rate cut lasted for only a day as the equities resumed their southward journey on thin volumes.

Traded volume fell to 99 million shares of Rs6.3 billion value, from 179m shares of Rs10.6bn traded the day earlier.

Foreign investors were net buyers of $0.19m worth stocks, the inflow witnessed in the banks and cements sectors. Among local participants, companies offloaded shares of $5.20m value.

“Investors adopted the wait and see approach and were slow to take fresh positions ahead of the budget FY16,” Intermarket Securities Executive Director Raza Jafri said.

Zulqarnain Khan, Executive Director at Next Capital, thought that the investors were on the conservative side in terms of trading.

He pointed out that investors took fresh positions in PAEL, which rose 2.9pc, following the aggressive future plans revealed by the management in their analyst briefing on Monday.

Analyst Abdul Azeem at Spectrum Securities observed that the oil and gas and banking sectors came under pressure, due to drop in international crude prices and the falling spreads.

“Owing to their heavy weight age in the index, those sectors pulled down the entire market,” he said.

Market participants said that after Monday’s run up in highly-leveraged cement scrips, profit-taking was witnessed in the sector with DGKC, FCCL, MLCF and CHCC all ending lower.

Analyst Ahsan Mehanti commented that the cement stocks were battered on uncertainty over the government Public Sector Development Programme (PSDP) commitments in the federal budget 2015-16.

“Security unrest in the city and drop in global crude prices played a catalyst role in bearish activity at KSE.”

Published in Dawn, May 27th, 2015

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