Both the indices passed through a virtual standoff caused by some psychological depressant but managed to finish above their bench-mark levels despite highly erratic performance turned in by the leading oil, bank and cement sectors.
While the 30-share index held well above its base of 10,000 points, the 100-share index broke through the psychological barrier of 10,000 points.
But the falling daily volumes reflected the investors’ fear of a slowdown in the economy. The rumour of lowering of Pakistan rating by a foreign company and higher interest rates worried investors, while the prevailing political uncertainty in the wake of tension in Balochistan also took its toll in the form of widespread price erosions.
I don’t think investors will opt for long-term buying on any of the counters until sanity returned to the political background news and the prevailing uncertainty ended, Faisal Abbas a leading stock analyst said.
The market performance may remain choppy as leading financial institutions were playing safe until the investors were assured that the current political polarization will be defused by some government move, he added.
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There was more than one investor-worry, both financial and political but notable among them was the lack of demand from any quarter. The market appeared to be the victim of demand rather than any other factor.
A late recovery was staged by the market trendsetters, notably banks followed by reports that some foreign investors were interested in having a stake in local banks, either total buyout or in the form of participation in the management. The Standard Chartered Bank had already purchased the controlling shares of the Union Bank and sell-off of some others was being rumoured.
The trading resumed on a higher note on early buying in some of the blue chips but the mid-week selling at inflated levels pushed them down.
The heating up of the political scenario in the backdrop of Nawab Akbar Bugti’s death and the fears of law and order situation appeared to be one of the chief inhibiting factors behind the market current volatility, said a leading floor broker.
Both the newcomer 30-share and 100-share indices, after opening higher followed the lead of general market trend and fell despite attempted rallies triggered by active short-covering on selected counters.
Analysts said that the investors were still confused about the two and the absence of proper guidance from leading brokerage houses to their clients - the confusion continued.
The big question among the prospective investors was which one of the two fully reflected the future financial outlook of the market and where to invest, they said adding that the physical activity in coming sessions was expected to show how and where to invest in the prevailing conditions.
Some analysts said that the new index was expected to significantly add to daily volumes once investors fully understood the mechanism behind the two and their impact on the broader market.
Some of the hereto inactive shares managed to finish higher by Rs10.35 and 18.50 for the Treet Corporation and the Pakistan Services followed by Bata Pakistan, Pakistan Suzuki Motors, Javedan Cement and some others.
But the leading shares, notably Dawood Hercules, Atlas Honda, Pakistan Petroleum, Pakistan Oilfields, the OGDC, National Bank, the MCB, Attock Petroleum, the IGI Insurance, the PSO, National Refinery and many others finished with sharp fall.—Muhammad Aslam