KSE News (October 8th Week)

KSE 100-index is expected to move down stairs due to large expected selling next week because State Bank of Pakistan slashed the interest rate by 50 basis points to 10 percent against the market expectations of 100 basis points. This will obviously be a profit-selling.

“The KSE is likely to invite profit-selling to get consolidated next week,” said Mohammed Sohail, CEO of Topline Securities, adding that the benchmark index may decline by 100-150 points in the week. In the week ended on Friday, the KSE-100 Index increased by 309.57 points, or two percent, to 15,754.39 points. The index hit an all-time high of 15,789 points on Thursday. The previous historic high of 15,676 points was recorded in April 2008. Sohail said that the selling would be triggered due to lower-than-expected interest rate cut by the central bank in its monetary policy announcement on Friday after the market closure. “The SBP slashed the rate by 50 basis points to 10 percent against 100 basis points market expectations.” He said that those companies, which had invited significant buying in the previous sessions over the expectations of higher rate cut, would be subject to profit-selling. “Cement and textile stocks might lead the downward rally.”

Faisal Rajab Ali, a member of the KSE, endorsed Sohail and added that the market would be subject to significant profit-selling next week. “The KSE-100 Index may plunge by 500 points in the immediate reaction to the lower-than-expected rate cut.” He argued that the market hit an all-time high on the rate cut hype. And now it is all set to find its way in downward direction as there seemed to be no immediate buying trigger in the market. The corporate results for the quarter ended September 30 have the potential to take the market to a new high in the near future, he said.

 An analyst at KASB Securities also foresaw a brief corrective phase at the KSE next week. “With the index hovering near the psychological level of 16,000 points, it would be interesting to see how the choppy waters are navigated.”

So brothers, be careful at this stage especially in buying.Please read the below article for further analysis.

NOTE: The information posted in this blog (forum) is based on current affairs & investors point of view. There may be discrepancy in the ground realities.