KARACHI: The rally on Wednesday turned out to be a dead cat bounce as the KSE-100 index dipped by 99.37 points (0.31 per cent) and closed at 31,839.11 on Thursday.

The market opened on a buyout note but failed to sustain an upward momentum and hit the intraday low by 158 points. Some value-hunting pulled the index out of the red in latter day trading, hitting intraday high by 122 points before selling emerged from all sides.

Besides the local institutions, foreign investors also decided to wait and watch as the political uncertainty was in the air with the Senate scheduled to vote on the no-confidence motion filed by the opposition against the chairman of the upper house.

The market was also concerned over the expectations of higher inflation for July; the traders’ threat to go on a prolonged strike; expectations from the upcoming earnings announcements; lure of fixed income securities due to their risk-free higher returns and the fear of further fall of the rupee.

Investor participation remained low with volume up by mere 1pc over the previous day to 70.7 million shares, from 70.2m. Traded value decreased by 24pc to Rs2 billion. Stocks that contributed significantly included Maple Leaf Cement, TRG Pakistan, Fauji Cement, Unity Foods and Pak Elektron, which formed 40pc of total volume.

Sector-wise, steel continued moving upwards while cement contributed mostly to the downside with Lucky, DG Khan and Maple Leaf closing in the negative. The government’s decision to increase prices of petroleum products failed to build the momentum in oil marketing scrips.

Mixed sentiment was seen in the Financials where big banks Habib and MCB closed in the negative. Top decliners were Pakistan Petroleum, lower by 25 points, MCB 18 points, Bank Al Habib 15 points and Fauji Fertiliser 11 points.

Published in Dawn, August 2nd, 2019