THE notices issued to the high government executives on the non-implementation of the apex court verdict on NRO dominated trading on share market after midweek and triggered a lot of selling by some foreign investors on fears of its negative fallout.
The share market, however, opened the new year account on a bit hesitant note as despite smart recovery staged by the fertiliser sector on reports of expected price hike linked to increase in gas rate, some leading base shares ruled easy under the lead of OGDC followed by foreign selling.
The benchmark index, however, could not follow the credible performance of the broad market and opened the new year account with a net fall of 65.65 points at 11,282.01 but well above the week’s low of 11,187.88.
The close was off by 222.31 points at 11,125.35 on some negative reports about the wellhead success by the Oil and Gas Development Corporation (OGDC) in a highly anticipated ZIN block and dragged the index to lower new year closing,” leading analysts said and added the discovery of gas should have kept investors in its fold.
They said that having massive weightage in the benchmark it pushed it sharply lower from the early higher opening on selling in it and some other leading oil and blue chips. It fell by Rs8 at Rs140.
Some others said OGDC had previous history to play havoc with the broader market owing to its weightage in the benchmark.However, it had the capacity to rebound the very next session on the strength of its weightage in the index.
Fertiliser shares, on the other hand, came in for strong covering purchases at lower levels and recovered in unison under the lead of Fauji Fertiliser and Engro Corporation on market talk of an increase in urea prices to compensate the rise in gas prices, he added.
“But I don’t call it a weak new year opening,” commenting on the new year higher opening said analyst Ahsan Mehanti. “The revival of demand on blue chip counters reflects that the sailing is expected to be a bit smooth under the cross-current of mixed news bag,” he added.
However, investors seemed to be in the process of adjusting themselves to the negative fallout from the political sector and go along the basic market fundamentals, he added.
Another analyst Samar Iqbal thinks the current lower level by the blue chip sector could attract an enormous short–covering but much would depend on the issue of ‘memogate’ and the political heat being generated by public meetings of leading political parties.
Future contract: After initial higher opening, leading shares on this counter came in for active profit selling after midweek and ended on-balance lower, although some of them managed to hold some of their earlier gains.
The selling on this counters reflected the foreign selling in ready counter under the lead of OGDC, which also suffered sharp fall on active selling with other leading oil shares including PSO, Pakistan Oilfields, National Refinery and Pakistan Petroleum.
The recent market trend-setters in the fertiliser sector also came in for late selling at higher levels under the lead of Fauji Fertiliser, Engro Corporation, Fatima Fertiliser and Fauji Fertiliser Bin Qasim, but National Bank and D. G. Khan Cement managed to close modestly higher.—Muhammad Aslam