KSE loses 382 pts on budget uncertainty
Monday, 8 June 2009
KARACHI, June 7: The Karachi stock market remained under the bearish spell in the wake of continuation of selling activities during most of the trading sessions as uncertainty over the upcoming budget and absence of leveraged products kept the investors sidelined, according to the Daily Times.
The Karachi Stock Exchange (KSE) 100-share index lost 381.99 points or 5.0 per cent to close at 6,894.62 points as compared to 7,276.61 points of the previous week.
Analysts said that pre-budget fear among investors also contributed to the market decline as investors awaited announcements for capital markets' taxation on various services while rise in international oil prices and positive trend in international equity markets failed to affect market sentiment on local concerns including non-availability of CFS and high investment costs.
The turnover was recorded at 125.06 million shares as compared with 188.83 million shares of the previous week, reflecting a decline of 33.77 per cent.
"The index is below its 30-day, but above its 100-day moving average, which indicates consolidation. The next support level is expected to be at 6,750 points," said Analyst at InvestCap Research, Abdul Azeem. "Breakout of this level indicates further downward move towards 6,400 points. Pressure indicators are in the neutral zone, which indicate consolidation."
Analyst at JS Research Bilal Qamar said foreigners remained active in the outgoing week, as their share in the total market traded value stood at 28 per cent as compared to 13 per cent last week.
Offshore investors continued to remain the net sellers over the week as foreigners bought shares worth $38 million and sold $50 million, resulting in net selling of $12 million. Nonetheless, the quantum of foreign net selling has shown a declining trend post Pakistan's inclusion in the MSCI FM Index on May 15. Since that date, foreigners bought $78 million worth of shares in comparison to $92 million sold resulting in net selling of $14 million till date. In contrast, net foreign selling stood at $287 million between Dec 15, 2008 and May 15, 2009.
Regional markets were in the positive zone on account of better than expected US economic data and higher commodity prices. JKSE, PSI Shanghai SE, Sensex and KLSE were up by 8.5 per cent, 5.8 per cent, 4.6 per cent, 3.3 per cent and 3.0 per cent respectively. The rally in the regional markets however, failed to act as a trigger for the local bourse.
Reasons for prevalence of the negative sentiments include continuation of selling activity as investors fear on federal budget announcements, said Analyst at Shahzad Chamdia Sec Ahsan Mehanti. Other major factors are that banking and brokerage services received intense pressure ahead of services sector taxation announcements on June 13, while investors remained concerned over foreign selling, weakening rupee value, security situation in the country and high liquidity cost.
The Karachi Stock Exchange (KSE) 100-share index lost 381.99 points or 5.0 per cent to close at 6,894.62 points as compared to 7,276.61 points of the previous week.
Analysts said that pre-budget fear among investors also contributed to the market decline as investors awaited announcements for capital markets' taxation on various services while rise in international oil prices and positive trend in international equity markets failed to affect market sentiment on local concerns including non-availability of CFS and high investment costs.
The turnover was recorded at 125.06 million shares as compared with 188.83 million shares of the previous week, reflecting a decline of 33.77 per cent.
"The index is below its 30-day, but above its 100-day moving average, which indicates consolidation. The next support level is expected to be at 6,750 points," said Analyst at InvestCap Research, Abdul Azeem. "Breakout of this level indicates further downward move towards 6,400 points. Pressure indicators are in the neutral zone, which indicate consolidation."
Analyst at JS Research Bilal Qamar said foreigners remained active in the outgoing week, as their share in the total market traded value stood at 28 per cent as compared to 13 per cent last week.
Offshore investors continued to remain the net sellers over the week as foreigners bought shares worth $38 million and sold $50 million, resulting in net selling of $12 million. Nonetheless, the quantum of foreign net selling has shown a declining trend post Pakistan's inclusion in the MSCI FM Index on May 15. Since that date, foreigners bought $78 million worth of shares in comparison to $92 million sold resulting in net selling of $14 million till date. In contrast, net foreign selling stood at $287 million between Dec 15, 2008 and May 15, 2009.
Regional markets were in the positive zone on account of better than expected US economic data and higher commodity prices. JKSE, PSI Shanghai SE, Sensex and KLSE were up by 8.5 per cent, 5.8 per cent, 4.6 per cent, 3.3 per cent and 3.0 per cent respectively. The rally in the regional markets however, failed to act as a trigger for the local bourse.
Reasons for prevalence of the negative sentiments include continuation of selling activity as investors fear on federal budget announcements, said Analyst at Shahzad Chamdia Sec Ahsan Mehanti. Other major factors are that banking and brokerage services received intense pressure ahead of services sector taxation announcements on June 13, while investors remained concerned over foreign selling, weakening rupee value, security situation in the country and high liquidity cost.