KARACHI, May 31: Stocks further pummelled on the Karachi stock market on Thursday as the KSE-100 index lost another 85.14 points to close at 13,786.62 in thin trade.

Market experts said that foreign equity buying, which amounted to net $3.60 million on Thursday, helped share values rise in early trade.

However, local institutions and individuals were reluctant to commit funds to stocks until the announcement of the Federal Budget on Friday.

A trader said that the investors were also nervous over the fall of rupee against dollar, which many thought could impact some of the major sectors. Analysts were re-evaluating the projected earnings.

Samar Iqbal, equity dealer at Topline Securities, observed that the fall in global markets and weak local currency kept investors on the sidelines. As a result market remained in narrow band with low volumes.

Cement sector remained under focus on conflicting news regarding reduction in excise duty in the new budget. PPL witnessed good activity after news that the government has revised upward its public offering price.

Ahsan Mehanti at Arif Habib Corp commented that uncertain global stocks and commodities, concerns over fall in rupee dollar parity amid macroeconomic instability and uncertainty over Pak-US relations on NATO supply issue played catalyst role in bearish sentiments despite support in cement and power sector on pre-budget speculations.

Hasnain Asghar Ali at Invisor Securities said that the bargain hunters ignored the bleak economic and financial picture being project and cautiously accumulated frontline stocks, which were thought to continue to offer consistent dividend yields and sustained growth in earnings.

Meanwhile, the budget leaks were received with mixed response. Reports indicated that the government had decided to abolish federal excise duty (FED) on 10 items, including cosmetics and filter rods.

The budget makers were thought to have ignored a major budgetary proposal of the Federal Board of Revenue (FBR) that sought to increase the rate of FED in value addition mode from Rs1 per kg to Rs4 per kg on the import of edible oil.

The reports that the government’s failure to release Rs18 billion to a group of eight independent power producers (IPPs) was keeping them from utilising optimal capacity and that FED on cement was expected to be reduced by only Rs100, from Rs500 to Rs400 per ton, against the earlier industry hopes of FED cut to one-half, from Rs500 to Rs250 ton. On the positive side, it was thought that the government would decided to reduce the rate of 20-22 per cent sales tax on nearly 100 raw materials and inputs to standard rate of 16 per cent and the Oil and Gas Regulatory Authority (Ogra) had recommended reduction in price of Petroleum Oil and Lubricant (POL) products by Rs13.24 per litre from June 1.

The KSE-30 index fell 70.28 points to 11,951.07. Turnover slumped further to 125 million shares, from 129 million shares the earlier day.

However, in terms of trading value, there was increase of Rs15 million to Rs5.659 billion, from Rs5.643 billion. Market capitalisation declined by Rs20 to Rs3.528 trillion, from Rs3.548 trillion.

Among 365 active issues, 185 ended in red, compared to 106 in the green zone. The active list was led by DGK Cement, down by 35 paisa to Rs41.14 on 12m shares, Jah Sidd Co fell by 77 paisa to Rs14.85 on 11m shares, Engro Corporation lost another 90 paisa to Rs107.60 on 9m shares.

Lucky Cement shed 9 paisa to Rs126.29 on 8m shares, Engro Foods decreased by Rs3.01 to Rs65.19 on 6m shares, PTCL was lower by 51 paisa to Rs14.81 on 5m shares, Fatima Fertiliser Co shed 16 paisa to Rs24.15 on 4m shares, Fauji Cement down 5 paisa to Rs6.15 on 3m shares, Lafarge Pakistan slid 4 paisa to Rs4.54 on 3m shares and NBP lost 26 paisa to Rs45.09 on 3m shares.