KARACHI: Karachi stock index fell on Tuesday, weighed down by sliding oil prices, but banking stocks gained up to 2.2 percent on strong earning anticipations ahead of the publication of their quarterly financials, dealers said. The benchmark KSE-100 Index closed down 151.07 points, or 0.44 percent, to 34,031.78 points against 34,183.85 points recorded in the last session. The highest index of the day remained at 34,278.73 points, while the lowest level of the day was recorded at 34,010.10 points.
The KSE-30 Index also fell 122.65 points, or 0.59 percent, to 20,535.54 points against 20,658.19 points. “Due to more than five percent correction in the international oil prices some profit taking was seen in local oil stocks like OGDC, PPL and POL,” said analyst Mohammad Rizwan at Topline Securities.
“…. But some support was witnessed in banking stocks on the back of improved upcoming quarterly results.” Analysts said the index opened flat but quickly turned negative, reacting to the fall in oil, prices for which are being driven down by abundant supply. They said US oil prices tumbled $2.50/barrel on Monday after data showed that the Organization of the Petroleum Exporting Countries (OPEC) pumped abundant oil in the last three years. OPEC will not likely cut production levels.
Analysts said today’s oil inventory data will closely be watched for more clues. “Moving forward, we expect the market to have a positive correlation with international crude oil prices,” said an analyst. “One of the main factors of the correction is undoubtedly the continuing fall in the oil price,” said an analyst. “Future development of events in oil price scenario is hard to predict, but for now the market is likely to react on quarterly financials and we expect many grounds for improvement.”
Analyst Ahmed Saeed Khan at JS Research said negativity can be attributed majorly to exploration and production, cement and fertiliser sectors.
News of LUCK expanding in the North gives a rise to an expectation that other major players will do the same, which can eventually lead to the big players to get into a price war to capture market share. But, analysts said this expectation will take two to three years before turning into a reality. Biggest laggards of the cement sector CHCC down 1.13 percent and LUCK 1.03 percent. Confusion still prevails over the pricing of fertilisers bag. Therefore, pressure was seen on the overall sector. Volumes improved by 22 percent at 239.43 million shares as compared to 195.91 million shares a day ago. Trading value improved 10 percent to Rs10.83 billion. However, market capitalisation fell Rs28 billion to Rs7.27 trillion.
Out of a total of 394 active stocks, 223 closed with a decline in their prices, 144 closed with increase, and 27 closed with no change. Pace (Pak) Ltd was the volume leader with 40.44 million shares as it closed at Rs6.75 with a fall of 17 paisas.
This was followed by Pak ElektronXD with 21.40 million shares, which closed at Rs81.24 with a fall of Rs1.12. TRG Pak Ltd. recorded trade in 18.16 million shares, as it ended down at Rs36.79 with an increase of eight paisas.