Bears rule stock market

LAHORE - The stock market, which remained opened only for four days during the week on account of Eid holidays, remained in the grip of bears due to less-than-expected interest rate cut and political uncertainty caused by the NRO. The KSE 100-index lost 99 points and closed at 9,206 points
Pre-Eid week remained negative as only 12 points could be added in the bourse within two days when 11 points were added on Tuesday while only one point could be added on last day of the business week on Thursday. Likewise, the equity market remained negative when it shed 84 points on Monday while on Wednesday it lost 29 points. All in all, the Karachi Stock Market shed 99 points during the week to close at 9,206 points as the KSE started its business week with 9,305 points and ended at 9,206 points.
The KSE could not sustain surge spree during the last business week mainly due to less-than-expected reduction in discount rate announced by SPB and political uncertainty on the back of NRO lapse. Fall in international oil prices and investors’ concerns over circular debt issue affecting oil refineries cash flows played a catalyst role in negative sentiment.
Absence of buyers during week forced low volume price erosion in the expensive stocks and the benchmark went tumbling down. While economic concerns, such as high government borrowing, growing liabilities’ ($55 billion), reservations regarding achieving revenue and export targets and likely rising trend in inflationary pressures witnessed the KSE in steep decline.
Prior to Eid holidays, intense selling pressure phenomenon put the local bourse to start the week in red digits while SBP move to keep discount rate to ignorable change of 0.5 per cent in its monetary policy resulted in panic offload by nervous investors. In fact, the stance of SBP authorities of not opting for regulatory changes to support the liquidity injection invited investors to get jitter who were expecting the equity would surge. While, turnover recorded at 79.458 million shares reflecting downward trend.