Market watch: KSE-100 sheds 342 points as investors resort to profit-taking

Benchmark index decreases 0.86% to settle at 39,271.94

KARACHI: After two consecutive days of gains, bears dominated the KSE-100 index on Wednesday during a dull trading session as investors resorted to profit-taking, erasing 342 points from the index.

Automobile and textile stocks outperformed on the back of Economic Coordination Committee's approval of restrictions on vehicle imports and permission for duty-free import of cotton.

The stock market opened downwards and volatility emerged immediately, resulting in multiple rises and falls. Occasionally, investors cherry-picked stocks but the gains could not be sustained.

A selling spree towards the end of the session pulled the bourse below the 39,300-point mark. Many investors chose to remain on the sidelines as they awaited the announcement of mini-budget next week.

Volatility in the market could be attributed to the opposition leaders' decision to form a committee for devising a joint strategy on various issues coupled with the expected hike in federal excise duty in the upcoming mini-budget, which could possibly stop investors from taking fresh positions in the market.



At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 342.24 points or 0.86% to settle at 39,271.94.

JS Global analyst Maaz Mulla said equities closed on a negative note with the benchmark KSE-100 index losing 342 points.

"The market started off on a weak note and remained on the downward trajectory amid low volumes and lack of participation," he said. "Trading remained lacklustre throughout the session due to lack of investors' interest as they waited for the mini-budget scheduled to be presented in the National Assembly on January 23."

Top volume leaders were K-Electric (-1.1%) and Pak Elektron (-2.3%) with more than 20 million shares changing hands.

The cement sector closed lower where big players lost value. Lucky Cement (-1.7%), DG Khan Cement (-2.4%), Maple Leaf Cement (-2.2%) and Pioneer Cement (-1.9%) were major losers of the sector.

Profit-booking was witnessed in the exploration and production sector where Pakistan Petroleum (-1.6%), Pakistan Oilfields (-1.9%) and Oil and Gas Development Company (-0.9%) were the major laggards despite a slight increase in crude oil prices in the international market.

"Moving forward, we recommend investors to track news flow with respect to the mini-budget," the analyst added.



Overall, trading volumes decreased to 92.77 million shares compared with Tuesday's tally of 122.24 million. The value of shares traded during the day was Rs4.58 billion.

Shares of 333 companies were traded. At the end of the day, 96 stocks closed higher, 218 declined and 19 remained unchanged.

K-Electric was the volume leader with 13.2 million shares, losing Rs0.07 to close at Rs6.29. It was followed by The Bank of Punjab with 10.7 million shares, losing Rs0.05 to close at Rs12.85 and Pak Elektron with 6.9 million shares, losing Rs0.65 to close at Rs28.09.

Foreign institutional investors were net sellers of Rs496.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.