Investors opted to book profits on available margins after foreigners appeared net sellers of the stocks worth over two million dollars on Monday.
“There was a fear in the market that foreigners might continue offloading holdings at the KSE,” said an analyst.
On the fundamental ground, offloading in the banking stocks was logical after a massive cut of 150 basis points in the discount rate by the State Bank of Pakistan last week.
“Decline in the discount rate would impact the rate of profits of listed banks. Accordingly, the prices of the banking stocks were needed to be adjusted at the local bourses.” The MCB Bank, the National Bank of Pakistan and the Habib Bank Limited were the three main banking stocks, which shed notable points on indices. Trade in these three stocks was, however, not of significant volumes.
Furthermore, the Oil and Gas Development Company Limited (OGDCL) alone slashed over 18 points in the 100 Index. The stock closed at Rs139.99 with a loss of Rs1.04 with meager 493,000 shares turnover. There was no fundamental change in OGDCL as such. The ongoing circular debt might have downplayed it, an analyst said.
Hub Power Company, which was the volume leader with exceptionally 22.46 million shares turnover, lost 90 paisas to Rs41.67. There was a rumour in the market that the company is considering an off-market deal at Rs40 per share, the analyst added.
The fertiliser stocks, however, extended the supporting hand to the indices and saved the 100 Index from falling below 12,000 points crucial level, the analyst said. Ahsan Mehanti, Director at Arif Habib Investments, said that it was institutional profit-booking that pushed the market down.
“Law and order situation in the city and concerns for rising trade deficit affected the sentiment despite strong recovery in the global stocks and commodities after France and Germany pledged to plan end to Eurozone debt crisis.”
The KSE-30 Index declined by 89.26 points, or 0.77 percent, to 11,545.08 points.
Turnover in the ready market remained significant at 141.70 million shares. The turnover in the futures market was recorded at 9.89 million shares against 9.505 million shares turnover.
Out of the total 378 companies’ stocks traded on the broader market, 104 advanced, 183 declined and 91 stocks remained unchanged.
Fatima Fertilizer Company was the second volume leader with 11.95 million shares turnover. The stock closed at Rs21.26 with a gain of 90 paisas; followed by Pakistan Telecommunication Company, which closed at Rs12.59 with a gain of 13 paisas on a turnover of 9.36 million shares
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