Market watch: Profit-taking across the board as KSE-100 falls below 50,000

Benchmark index falls 326.50 points to end at 49,785.17

KARACHI: A brief positive open paved way for profit-taking as the KSE-100 Index fell close to 570 points in intra-day trading before recovering slightly, but still ending negative.

After a steady increase for the past four consecutive sessions, the index fell below the 50,000 level, registering its first negative finish in almost a week.

At close on Tuesday, the Pakistan Stock Exchange's (PSX) benchmark index fell 326.50 points, or 0.65%, to end at 49,785.17.

According to Elixir Securities, Pakistan equities took a breather after four-straight session of gains and settled below 50,000 on across-the-board profit-taking.



"Stocks opened and traded positive for a brief period as morning gains led KSE-100 Index to test 50,300 level. Index, however, couldn't sustain gains for long and steadily declined to test support at 49,500 level as investors understandably took advantage of recent highs and booked profits in the wider market," said analyst Ali Raza.

"Pak Suzuki (PSMC PA +5%) continued its winning streak, opening at the upper price limit for second consecutive session on recent announcement of another taxi scheme.

"Moreover, the earnings announced by PSMC near market close also beat expectations by a wide margin," said Raza.



"Hub Power (HUBC PA -2.5%), Engro Corp (ENGRO PA -2.3%) and Pakistan Petroleum (PPL PA -2.9%) emerged as top three laggards of the day; all cumulatively contributing nearly half of points to Index decline.

"Meanwhile, MARI Petroleum (MARI PA -1.2%) and Maple Leaf (MLCF PA -1.4%) both closed lower with former announcing subpar earnings," the analyst commented.

"We see market entering a consolidation phase and see range-bound trading in near term where 50,000 level will likely provide immediate resistance to KSE-100 Index. Ongoing results season, however, will keep investor interest intact in the wider market," he added.

JS Global analyst Nabeel Haroon said the market finally broke its bullish streak as the index lost around 326 points to close at 49,785 level (down 0.65%) after closing in the green zone for four consecutive trading sessions.



"However, INDU and PSMC in the automobile sector gained to close on their respective upper circuits on the back of their respective result announcements.

"INDU posted earnings of Rs130.34/share in its 9MFY17 result announcement on Monday along with a dividend of Rs30/share taking the pay-out to date to Rs80/share," said Haroon.

"PSMC announced its 1QFY17 result on Tuesday in which it posted earnings of Rs15.88/share, which were higher than market expectations.

"MLCF (-1.41%) lost value to close in the red zone as the cement company declared its result for 9MFY17 in which it posted earnings of Rs7.68/share," he remarked.

"SNGP (-0.51%) declined as investors came in to book profits in the gas utility after its 9MFY17 result announcement in which it posted earnings of Rs9.63/share.



"Moving forward, we reiterate our bullish stance on the market and recommend investors to see any dips in the market, such as Tuesday's session, as an opportunity to accumulate value stocks," the analyst added.

Overall, trading volumes fell to 381 million shares compared with Monday's tally of 399 million.

Shares of 395 companies were traded. At the end of the day, 138 stocks closed higher and 239 declined while 17 remained unchanged. The value of shares traded during the day was Rs18.9 billion.

Engro Polymer was the volume leader with 30.9 million shares, gaining Rs0.28 to close at Rs29.13. It was followed by Summit Bank with 29.8 million shares, gaining Rs0.43 to close at Rs4.75 and Azgard Nine with 28.7 million shares, gaining Rs1.00 to close at Rs14.12.

Foreign institutional investors were net sellers of Rs650 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.