Market awaits for approaching new lows

Other actives were led by TRG Pakistan, off Rs1 at Rs7.95 on 7m shares and Lucky Cement, steady by 25 paisa at Rs139.10 on 5m shares. Share values on Tuesday, the second day of the trading week under review remained under pressure and further fell across the board as investors continued to unload long positions to clear their leveraged positions amid panic created by the falling value of the rupee against the dollar. The 100-share index was off 264.29 points at 14,408.84.
But unlike the previous session there were buyers at the dips on selected counters under the lead of oil shares, which allowed a good number of shares to finish well above their initial lows. Some brokers said the current correction may now be over and a strong rebound could follow it even tomorrow.
Although ended well above the session's low of 14,319, at 14,408.84 on active short-covering in the oil shares and some other pivotal, the 100-share index shed another 264.29 points. The total loss during the last two sessions was over 500 points or four per cent, which eroded another Rs80 billion from the market capital at Rs 4420 billion. Its junior partner also fell by 383.16 points at 17,267.15. The market has already under went a needed technical correction during the last six sessions, said a leading broker and indications are that the bulls may be back by tomorrow and put it back on the rails despite no encouraging news from the political front.
The currency market was in a virtual turmoil for the last couple of days as the demand for the dollar on various counts had pushed the rupee to a new low, analysts said.
"As the share and the currency business are co0related in more than one way as an investment toll, it does affect the other at the weak financial moments," they said, adding: "When too chasing a too few dollar, the outcome is logical."
But what seems to have aggravated the situation and hastened the market decline was heavy selling by the foreign investors for the last four consecutive sessions eroding about $7 billion from the market capital at $68.401 billion form the recent peak of $75.500 billion, said leading analyst adding it is a massive erosion in a couple of sessions.
Analysts view the current creeping market crash in various ways. Some say the correction was long overdue in a massively overbought market but it was delayed owing to higher corporate announcements. Some other claims the weak rupee did affect stock trading but not to that extent it has been affecting now, it appears to be the political uncertainty, which seems to be triggering panic selling.
Minus signs again dominated the list under the lead of EFU Life Assurance and Siemens Pakistan, off by Rs30.23 and Rs34, JS Gold, JS & Co, MCB Bank, Adamjee Insurance, EFU Life, Lakson Tobacco, Pakistan Refinery, PECO, HinoPak, Atlas Honda, Dawood Hercules, Ferozsons Lab, AKD Capital, Colgate Pakistan and Shezan International, off by Rs10.35 to Rs29.47.
Unilever Pakistan and Fazal Textiles managed to finish higher by Rs23 and Rs28.99. They were followed by PSO, Saphire Textiles, Sapphire Fibres, Attock Petroleum, Indus Motors, and Engro Chemical, which posted gains ranging from Rs4.25 to Rs10.15. Trading volume showed a modest rise at 198m shares from the previous 181m shares but losers held a strong lead over the gainers at 241 to 86, with 21 holding on to the last levels. The most active list was again topped by Bank of Punjab, off Rs2.69 at Rs52.41 on 8m shares followed by OGDC, lower by Rs1.95 at Rs130.95 on 7m shares, Bank Alfalah, up 63 paisa at Rs54.90 also on 7m shares, D.G. Khan Cement, sharply lower by Rs4.55 at Rs97.95 on 7m shares, Engro Chemical, up Rs6 at Rs325.50 on 6m shares, Arif Habib Securities, lower 99 paisa at Rs180 also on 6m shares, and WorldCall Telecom, lower by 93 paisa at Rs14.77 also on 6m shares. Other actives were led by NIB Bank, easy by 55 paisa at Rs15.40 on 6m shares, Pak PTA, lower 24 paisa at Rs5.50 also on 6m shares and JS Investment off Rs1.39 at Rs103.40 on 6m shares. Stocks on Wednesday recovered from the previous lows as a section of investors covered positions on selected counters under the lead of financial institutions but the rally appears to be too feeble to give definite direction to the market. It was, however, satisfying to note that the market broke the extended bearish spell and recovered under the lead of oil sector triggered by reports of fresh record rise in the crude oil prices above $122 per barrel. The 100-share index recouped 46.45 points at 14,455.29 from the previous massive loss of 1,000 points.
On technical grounds the recessionary spell was also overdone as after having shed 1,000 points or 6.5 per cent in value over the last six sessions, the index needed technical correction based on basic positive fundamentals, analysts said. The interesting feature was that despite the weakness of shares of the Mansha Group, notably MCB bank, the oil share-based rally manifested itself in a bigger way indicating that the worst may be over by now. "But the weakness of its junior partner, which fell modestly about 19 points and the close below the session's high of 14,57.50 reflects that a section of investors was still unsure about the future direction of the market," they added. The volume figure was well below the 200m share mark as investors just readjusted their portfolios here and there but did not opt for fresh buying even at the attractively lower levels, some others said.