Market watch: KSE-100 drops to near four-day low on profit-taking

Benchmark index falls 345.81 points to end at 49,481.70

KARACHI: The stock market fell to near four-day lows on Thursday as investors in the wider market resorted to profit-booking following a recent smart rally.

At close, the Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index recorded a fall of 345.81 points, or 0.69%, to end at 49,481.70.

Elixir Securities, in its report, stated that the market struggled to find clear direction until midday and the benchmark index traded in a narrow range. It was followed by sell-off reportedly from local institutional investors that led to a steady decline in the Index that tested support near 49,500.

"Almost all key sectors closed lower, however, major decline in percentage terms was witnessed in pharma (-1.49%), consumer staple (-1.35%) and energy (-1.09%) sectors," said analyst Ali Raza.



"Pakistan Petroleum (-1.8%) recorded profit-taking after its earnings came in line with estimates while information released during the day of hydrocarbon discovery failed to have any positive impact."

On the other hand, Hub Power (-0.4%) recovered from the day's low to close little changed despite announcing lower-than-expected earnings.

"[We] Expect the market to cover back declines in days ahead as savvy investors jump in to take advantage of current weakness and cherry-pick value plays including stocks that are slated for inclusion in the MSCI Emerging Markets Index," he added.

JS Global analyst Nabeel Haroon said volatility prevailed in the market during initial hours of trade as the index continuously oscillated between positive and negative zones.

“Selling pressure was witnessed during latter hours and the index lost around 346 points to close at 49,482,” he said.



Pak Suzuki Motor Company (+5%) continued its upward trajectory as the recent result announcement (1QFY17 EPS of Rs15.88) by the company and news of Orange Cab scheme by the government of Punjab, under which 100,000 cars would be provided to unemployed youth of the province, kept investor interest alive in the stock, said Haroon.

Hubco (-0.43%) closed in the red zone with a slight fall as the independent power producer announced 9MFY17 results. The company posted EPS of Rs6.60, which was down by 9% year-on-year.

Mughal Iron and Steel (-1.17%) lost value as investors booked profit in the stock after its 9MFY17 result announcement. The company posted EPS of Rs5.78 along with cash pay-out of Rs2/share, the analyst said.

Habib Bank Limited (-1.62%), Nestle (-4.11%) and Pakistan Petroleum (-1.81%) were the major index movers as they lost value that weighed on the index.

“Moving forward, we recommend investors to see any dip in the market as an opportunity to accumulate value stocks,” he added.



Overall, trading volumes rose to 398 million shares compared with Wednesday's tally of 323 million.

Shares of 403 companies were traded. At the end of the day, 174 stocks closed higher and 208 declined while 21 remained unchanged. The value of shares traded during the day was Rs14.8 billion.

Engro Polymer was the volume leader with 36.6 million shares, gaining Rs0.81 to close at Rs29. It was followed by Aisha Steel Mills with 27.9 million shares, gaining Rs0.88 to close at Rs26.08 and Azgard Nine with 26.9 million shares, gaining Rs0.18 to close at Rs14.29.

Foreign institutional investors were net sellers of Rs358 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.