Karachi stocks remain depressed as 100-index loses 130.30 points

KARACHI: Bearish sentiments continued to dominate the Karachi stock market on Tuesday as the benchmark 100-share index closed negatively on account of fears of increase in discount rate, analysts said. The Karachi Stock Exchange (KSE) 100-share index shed 130.30 points to close at 10,448.19 points as compared with 10,578.49 points of the previous session. The KSE 30-share index lost 132.52 points and closed at 11,864.05 points. The increase in discount rate would affect leveraged sectors including fertilisers, cement, textile and automobiles Investors are concerned that the SBP would further tighten its monetary policy and increase interest rates by 50-150bps.Analysts said the KSE 100 index opened in the red zone with an initial decline of 222 points but at the end of the closing session it managed to reduce its losses ending eventually with a loss of 130 points. The market turnover increased 36.85 percent to 113.59 million shares as compared to 83.00 million shares traded in the previous session. However, the overall market capitalisation declined 1.15 percent to Rs 3.266 trillion as against previous session’s Rs 3.304 trillion. Out of 265 companies, 97 closed in positive zone, 152 in negative while 16 remained unchanged. Husnain Asghar Ali, Analyst at Aziz Fida Hussein and Company said attractive valuations of the cash rich stocks having least dependence on the economic growth, which disallowed a full stretch decline, and the day’s loss was restricted to 3 percent and the news that the ‘special purpose fund’ has started capitalising the opportunity inspired other market participants and post mid-day index staged a healthy recovery. The magic number to be announced by the SBP has certainly halted many. Over debated issue of ‘rise in interest rates’ could be harmful as it has given birth to yet another tool of speculation to those having an access to the privileged information. Ahsan Mehanti, Senior Analyst at Shahzad Chamdia Securities said reasons for negative index include expected increase in CRR & SLR requirement that is expected to affect banking sector earnings, political uncertainty, falling rupee value against the dollar, foreign divestment, declining international equity markets and high discount rates negatively affected investors’ confidence. NIB Bank was the volume leader in the share market with 11.27 million shares as it closed at Rs 9.80 after opening at Rs 10 losing 20 paisas. The futures’ market turnover went down to 16.43 million shares as compared to 12.14 million shares traded in the previous session. Fourteen of the companies closed in the positive zone, 24 in negative while one remained unchanged. staff report