20000225

Blue chips undergo minor trimming

RECORDER REPORT

KARACHI: The much-awaited downward technical correction emerged at Karachi stock market on Thursday where blue chips and investment stocks faced minor trimming. However, buying kept the market to close above 2,000 mark.

The KSE-100 index registered a fall of 8.27 points or 0.41 percent to 2,005.19 from 2,013.46 of Wednesday. The volume amounted to 275.938 million shares as against 306.706 million shares of Wednesday . The market capitalisation moved down to Rs 509.914 billion from Rs 512.891 billion of yesterday.

Mohammad Zubair Ellahi of KAB Securities said that the market was consolidating its position around current levels. The zig-zag movements during the session could be attributed to breaking and crossing of major psychological barrier.

He said that the approaching clearing with optimism for inflated closing might keep the tempo positive. The broader term outlook was still positive.

The market during the first half of the session saw hefty declines as the index fell by over 39 points. The selling pressure was evident as all the market punters were ready for this slide. The index during couple of weeks had improved by over 200 points and correction was expected any moment.

"The index saw a tide of declines and every investment scrip and trading stock recorded fresh falls", an analyst said. However, as the session proceeded, the selling pressure died down and the index closed with small fall of 8.27 points.

He said that a technical correction was necessary for the market to attain further gains. Though the market showed weakness, slide suffered by several hot favourities provided an opportunity to re-enter the market. Trading and investment stocks showed marginal declines. PSO and ICI fell by 15 paisa each, Dewan Salman 10 paisa while PTCL gained 45 paisa.

The erosion halted before the end of the session as several speculators and bargain hunters entered the rings as they found the evening levels quite lucrative to book good gains in the coming sessions.

A leading trader said that Hubco suffered slide because of no positive news from the government and the company side. The government believed that tussle with the private power producer had been the main factor behind the drop in the foreign investment in the country. However, the some trader said, the reports said that the Hubco had offered to reduce its tariff structure by 17.3 percent which was likely to be accepted by Wapda which might lead to resolution of dispute with the company.

ICI and PSO were active as buying and selling matched during the proceedings. The results of PSO were good as it declared 30 percent cash dividend on Wednesday. While despite a loss suffered by the ICI, it generated momentum as the traders remarked that the loss was due to PTA plant, where non-PTA business saw a profit of Rs 1.123 billion in 1999.

PTCL on a trading of 121.968 million shares showed a rise of 45 paisa to Rs 32.85, Hub Power moved down to Rs 27.85 from Rs 28.25 as nearly 34.628 million shares changed hands, ICI on a volume of 25.142 million shares closed at Rs 14.55, lower by 15 paisa, Dhan Fiber on a business of 21.564 million shares moved down by Rs 10.20 from Rs 11.15 and PSO on a turnover of 18.425 million shares closed at Rs 262.85, lower by 15 paisa.