KARACHI, July 13: Shares at the Karachi stock market shed values on Friday with the KSE-100 index down 69.45 points to settle at 14,332.29 points. The turnover was thin and about the same as on Thursday.

In the first session, stocks could not find a firm footing. Yet the benchmark index crossed the 1,450 level to rise to day's highest 14,482.37 points.

With no official notice by the SECP-KSE on the meeting on Thursday, investors acted on rumours and news that filtered through market participants in the knowledge of what had come to pass. The effect, however, was positive. The possibility of allowing intra-day short sale was thought to be a major move in improving volume of trade.

The stocks however dived into the red in the second half of the day with even the cements losing bigger part of their day's gains. The two reasons that turned the tide against the market were the news that Moody's Investors Service had downgraded Pakistan’s foreign- and local-currency bond ratings by one notch to Caa1 from B3.

According to Zubair Hussain, head equity sales at Foundation Securities, the key drivers for Moody's rating action included: deterioration in Pakistan's balance of payments over the past year; the looming large repayments to the International Monetary Fund; the dwindling level of official foreign-exchange reserves and the institutional weakness stemming from political instability and constrained government finances.

Another big shock for investors was the depressing financial results by Fauji Fertilizer Bain Qasim (FFBL) which posted 1H2012 earning per share at Re 0.69; the board also skipping a dividend. As the results were the first to be released for the season, it spoilt investors' mood, who started to worry over other upcoming results.

Samar Iqbal, equity dealer at Topline Securities observed that despite positive outcome of SECP-KSE meeting on Thursday, market came under pressure following below expectations half year earnings announcement of FFBL. Further pressure was created after Moody's downgraded Pakistan's government bond ratings.

Ahsan Mehanti at Arif Habib Corp commented that the stocks closed lower amid concerns for downgrade of foreign and local currency bond ratings by Moody’s on macroeconomic concerns. Across the board, panic-selling was witnessed in the second session.

Institutional support was witnessed in blue chip stocks on improvement in Pak-US relations despite concerns over Supreme Court action regarding NRO implementation.

The market capitalisation-based KSE-30 share index lost 89.72 points to close at 12,402.31 points. Market capitalization was down by Rs17 billion to Rs3.654 trillion on Friday, from Rs3.671 trillion the day before.

Volume of shares traded edged a little higher to 112 million on Friday, from 109 million shares on Thursday. However, trading value decreased to Rs4.426 billion, from Rs4.630 billion.

In all, 364 stocks came up for trading on Friday with 141 ending in minus columns and 104 in plus with 119 shares remaining unchanged.

On the active list, D.G. Khan Cement again topped with 24m shares, up by 43 paisa to Rs43.49, followed by FFBL which dipped by Rs1.88 to Rs38.72 on 11m shares.

Fatima Fertiliser shed 9 paisa to Rs25 on 7m shares, Engro Foods plunged by Rs3.36 to Rs66.50 on 6m shares, NIB Bank added 13 paisa to Rs2.32 on 6m shares, Jah Sidd Co was down by 44 paisa to Rs13.79 on 5m shares, Lucky Cement rose by 61 paisa to Rs125.88 on 4m shares, Fauji Cement slipped by 8 paisa to Rs5.71 on 3m shares, Fauji Fertiliser shed 93 paisa to Rs116.81 on 3m shares and the stock in Engro Corporation fell by Rs2.37 to Rs102.49 on 2m shares.