KSE index down by 35.88 points ahead of monetary policy announcement

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KARACHI: The Karachi Stock Exchange (KSE) after observing lacklustre activity closed with a minor adjustment on Monday as the market participants stayed on the sidelines awaiting the monetary policy announcement, said dealers.

“In spite of lower-than-expected inflation numbers for the month of November, no major activity was seen at the local bourses. Investors preferred to book profits in banks amid hope that a further decline in the policy rate will affect their margins,” said Samar Iqbal, a dealer at Topline Securities.

The KSE-100 index lost 35.88 points, or 0.22 percent, to close at 16,537.98 points. The KSE-30 index shed 34.71 points, or 0.26 percent, to end at 13,387.10 points. Shares of 379 companies were traded, of which 179 advanced, 178 declined and 22 remained unchanged.

Dealers said that Sui Northern Gas Pipelines Limited (SNGPL) witnessed huge volume after the news that the government may increase gas prices. Bank Alfalah also remained in the limelight as investors believed that the company might announce better dividend this year also.

Hasnain Asghar Ali at Escort Capital said that tough comments by the International Monetary Fund (IMF) regarding health of the economy and financial imbalances coupled with poor law and order situation in the city dampened the market sentiment.

“The frontline banking stocks along with cement, fertiliser and distribution companies provided wider opportunities for the market participants due to satisfactory progress on gas pipeline project, keeping volumetric contribution of the quality stocks on the higher side,” said Ali.

Analysts said that the upcoming monetary policy, outcome of strategic dialogue with the United States and timely auction of 3G licence were likely to dominate the proceedings at the KSE in the running month.

Shakir Padela at JS Global said that the index, after starting the day on a positive note supported by the rally in the banking sector, was unable to sustain its intraday high of 16,634 points and ended down by 0.2 percent.

“The profit-taking in the banking sector was due to the lower-than-expected inflation numbers, resulting in the expectations of further monetary easing by the State Bank of Pakistan (SBP) in the upcoming monetary policy announcement next week. The oil and gas sector witnessed another day of lacklustre activity, while cement shares traded in a narrow range,” said Padela.

Impact of fresh negotiations with the IMF that may have stringent criteria in order to qualify for the programme may; however, force a change in the aggressive monetary stance, so has been the concern on the political horizon under the light of various judicial decisions and question on consistency in the policies in the post-election era.

The ready market volumes stood at 195.592 million shares as compared to 312.258 million shares in the last trading session.

Highest volumes were witnessed in SNGPL with a turnover of 16.008 million shares as the scrip lost three paisas to close at Rs24.13 followed by Bank Alfalah with a turnover of 14.642 million shares. It gained seven paisas to end at Rs16.81. Fauji Cement with a turnover of 13.012 million shares lost four paisas to finish at Rs6.91.


Courtesy: The News


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