KARACHI, June 19: The KSE 100-share index on Thursday failed to sustain it crucial level beyond 3,300 level on massive selling in Hub-Power and some other current favourites followed by some adverse comments on the market’s meteoric rise and allied fears of snap retreat in the absence of follow-up support. KSE index fell below the barrier of 3,300 at 3,288.79, off 17.74 points.
There was no immediate negative comment on Hub-Power’s overnight run-up aided perhaps by strong foreign buying on the perception that its next month’s board meeting could come out with a good interim. But the big sell-off just the following day gave pleasant surprise to everyone in the trade.
There was, however, an oblique reference to KSE chief’s warning that the current inflated badla rates and steep rise in most of the second-liners could attract panic selling any day. Outwitted by the warning, foreign investors liquidated long positions in Hub-Power and others followed by near-panic selling by the retailers.
The sell-off should have assumed an alarming proportions but institutional trader moved in to save the situation after having made massive buying in the PTCL, which holds 33 per cent weightage in the index, limiting its single-session decline.
After opening higher, the KSE 100-share index fell below its crucial level of 3,300 to finish with a net decline of 17.74 points at 3,288.79 as compared to overnight’s 3,306.53 points. The peak for the day was touched at 3,322.
“The mid-session selling was massive after investors took a long-term view of the KSE chief’s warning,” analysts said adding “the market’s rise above the barrier appears to be inspired to many on Wednesday after it crossed the rubicon.”
Over the last couple of weeks badla rates had swelled to year’s new peak levels as investors continued to build up long positions almost on all the counters aided partly by lower rates of bank financing. Being in a highly overbought position there is a possibility of a big sell-off accompanied by panic selling from some quarters.
The market is famous for its outstanding performance or panic selling without any bad news but rumours do the needful if bears opt for it, brokers said.
“I don’t foresee any big sell-off until the outcome of president’s US visit is known,” says a leading brokers. “There is a strong possibility of index resuming its upturn beyond the 3,300 index level during the next couple of sessions.”
However, the general perception is that the market’s current meteoric rise is not supported by the objective background news both on the political and economic fronts and it needs technical correction long overdue.
“The index could at least shed about 500 points during the president’s post-US visit trading to stay technically viable level,” they said. “But much would depend on the intensity of LFO issues that will assume new dimension after the president’s return.”
Bulk of the selling was confined to overnight volume leaders including Hub-Power, whose board meeting is due next month and PTCL and some others but most of the second-tier issues managed to stay firm as small investors hoping further rise clung on their positions.
Minus dominated the list under the lead of Gul Ahmed Textiles, Gatron Industries, Ferozsons Lab, Gillette Pakistan, Crescent Steel, Lakson Tobacco, Shell Pakistan and IGI Pakistan, off Rs2 to Rs7.10.
Some of the leading as well as secondliners in the textile sector manage to finish modestly higher, notable among them being Pak-Suzuki Motors, and Maqbool Company on the defaulter counter, up Rs3 to Rs5.10. Other good gainers were led by Alico, Umer Fabrics, Nestle MilkPak, Associated Industries, AKD Securities, Ahmed Hassan Textiles and Kohat Cement, which posted gains ranging from Rs1.70 to Rs2.70.
Trading volume was maintained on the higher side owing to near-panic selling in the leading shares and rose to 528m shares from the previous 506m shares as losers forced a strong lead over the gainers at 225 to 115, with 51 shares holding on to the last levels.
PTCL topped the list of most actives, up five paisa at Rs27.85 on 138m shares, followed by Hub-Power off 80 paisa at Rs36.80 on 119m shares, D.G. Khan Cement, easy by 10 paisa at Rs22.60 on 27m shares, FFC-Jordan Fertilizer lower 15 paisa at Rs13.50 on 24m shares and Pakistan Oilfields, higher by Rs1.35 at Rs215.45 on 22m shares.
They were followed by WorldCall, easy 10 paisa on 22m shares, Maple Leaf Cement, steady by five paisa on 20m shares, Telecard, higher by Rs1.05 on 13m shares, Engro Chemical, up 35 paisa also on 13m shares and Sui Northern Gas, lower 50 paisa on 11m shares.
FORWARD COUNTER: Forward counter also followed the lead of the ready where prices also fell barring PTCL, which rose by 10 paisa at Rs27.90 on 21m shares followed by Hub-Power, off 75 paisa at Rs36.85 on 17m shares.
PSO fell by 15 paisa at Rs220.20 on 8m shares, Sui Northern Gas, off 40 paisa at Rs34.25 on 4m shares and FFC-Jordan Fertilizer, easy 20 paisa at Rs13.60 on 3m shares.
DEFAULTER COMPANIES: Medi Glass came in for active selling and fell by 15 paisa at Rs2.95 on 64,000 shares followed by Suzuki Motorcycles, off 80 paisa at Rs12.80 on 22,500 shares and National Modaraba and S.S. Oils, up 10 paisa and off 35 paisa respectively at Rs1.35 and Rs6.05 on 20,500 shares each.