SBP’s gloomy report brings KSE down

KARACHI: The Karachi share market ended lower on Tuesday following the central bank’s forecast of lower economic growth and higher fiscal deficit, dealers said.

“Selling activity was witnessed†in the overbought market as the State Bank of Pakistan report indicated fiscal deficit rising to 6.3 percent of GDP in FY10 and GDP growth falling to 2-3 percent,” said Ahsan Mehanti, a director at Arif Habib Investments.


The KSE 100-share index lost 45.56 points, or 0.43 percent, to close at 10,658.15 points. The KSE 30-share index fell 58.15 points, or 0.56 percent, to end at 10,239.39 points.

Shares of 403 companies were traded, out of which 148 advanced, 242 declined, while 13 remained unchanged.

Hasnain Asghar Ali, a dealer at Aziz Fida Husein, said that sell-off that was quite evident towards the closing stages of last session continued on the opening. Local corporate investors offloaded main board stocks, he said.

“The stance of post-result sell-off added to the pressure. Buyers stayed nervous mainly because of expensive stocks’ selling by foreigners.”

The textile sector stocks continued to invite buying and register gains, mainly on the back of higher earnings expectations, said analysts.

Dealers said that main stocks of the banking sector remained under pressure because of unclear stance of banks’ chiefs regarding implementation of Supreme Court directives, but shares of small banks attracted buying.

Samar Iqbal, a dealer at Topline Securities, said the market took a breather of 0.42 percent with healthy volumes after touching a two-year high.

“Investors preferred to book profits as the market had gained 2.3 percent in previous four trading sessions. Many leading companies such as Oil and Gas Development Company Limited, MCB Bank, Nishat Mills Limited, LOTPTA and ICI announced their quarterly results, but investors still chose to trim their positions.”
Stocks analysts said investors remained concerned over rising circular debt in the energy sector.

Besides, limited foreign interest, institutional profit-taking and uncertainty over leverage product introduction also dampened the sentiment. Good earning announcements in blue-chip oil and chemicals sector scrips failed to generate buying.

The ready market volume decreased to 150.697 million shares from 158.05 million shares a day earlier. Highest volume was witnessed in LOTPTA with trade of 20.916 million shares.

The scrip lost 25 paisas to close at Rs10.18. It was followed by ANL with 15.879 million shares. It declined by 14 paisas to end at Rs11.60. LPCL was the third with trade of 9.17 million shares. It ended lower by 50 paisas to finish at Rs2.90.