PAKISTAN-ECONOMY-STOCKPakistan watch: Across-the-board selling pulls bourse down 220 points

KARACHI: Karachi bourse plunged 220 points as investors opted to bank profits ahead of a long weekend as the market is closed today due to Jummatul Wida (last Friday of the month of Ramazan). Inflation figures also dented confidence further pulling the index to close just above 23,000-point level.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index lost 0.95% or 220.92 points to end at the 23,091.86-point level.Trade volumes climbed to 199 million shares, compared with Wednesday’s tally of 141 million shares.

“The market closed the shortened week on a negative note with profit-taking witnessed across the board,” reported Ovais Ahsan, analyst at JS Global Capital.

Higher than expected consumer price index (CPI) at 8.26% year-on-year dented confidence further in late trading hours, pushing the benchmark index to 23,000 levels, said Harris Batla, analyst at Elixir Securities.

Shares of 355 companies were traded on Thursday. At the end of the day 123 stocks closed higher, 205 declined while 27 remained unchanged. The value of shares traded during the day was Rs8.99 billion.

Engro Foods sparked the bearish spell as lower than expected half-year earnings invited selling pressure. Investors questioned the food company trading at an exorbitant price-to-earnings ratio of 25 times fiscal 2013 earnings, considering dismal sales in the first half of the fiscal, said Ahsan of JS Global Capital. Its parent company Engro Corporation also followed suit closing down 4.92% in the session.

The banking sector also entered a corrective phase with National Bank of Pakistan and MCB Bank closing in the red as expectations of interest hike solidified after rise in inflation for July.

The cement sector, one of the most highly-leveraged sectors, weakened on the rumour of a rise in interest rates.

Pakistan Telecommunication Company SPOT was the volume leader with 17.54 million shares falling Rs0.3 to finish at Rs27.81. It was followed by National Bank of Pakistan with 15.58 million shares losing Rs2.62 to close at Rs55.68 and Fauji Cement with 12.91 million shares shedding Rs0.18 to close at Rs15.76.

Foreign institutional investors were buyers of Rs695 million and sellers of Rs597 million, according to data maintained by the National Clearing Company of Pakistan.

Published in The Express Tribune, August 2nd, 2013.

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