KSE-100 index drops 225.74 points to settle at 33,932.81. PHOTO: REUTERS
KARACHI: After a significant rise in the preceding session, the stock market retreated into the red zone on Wednesday as investors once again resorted to profit-booking.
The KSE-100 index got off to a positive start, however, the advance could not be sustained. Prevailing pre-budget uncertainty and Moody’s move to put five Pakistani banks under watch for possible ratings downgrade weighed on investors’ sentiment.
The desire to consolidate gains and book profit coupled with caution ahead of Eidul Fitr holidays from May 22 to May 27 fuelled bearish activity later in the day.
At close, the benchmark KSE-100 index recorded a decrease of 225.74 points, or 0.66%, to settle at 33,932.81.
Arif Habib Limited, in its report, stated that the market saw profit-booking across the board in the run up to Eid holidays and the long weekend.
“Though international crude oil prices remained high overnight, local investors paid little attention to that, given the long gap from Friday till Wednesday next week, which can cause stock prices to move in any direction,” it said.
Stocks of exploration and production firms, oil marketing companies and refineries, which recorded gains a day ago, faced profit-booking on Wednesday, whereas the cement sector experienced renewed interest from investors, the report added.
Furthermore, post-market closure on Tuesday, Moody’s notification about reviewing Pakistani banks for ratings downgrade caused stir among local investors, resulting in negative performance of the banking sector.
The technology sector topped the volumes chart with trading in 28.2 million shares, followed by cement firms (25.1 million) and oil and gas marketing companies (20.6 million).
Stocks that contributed positively to the index included Pakistan Services Limited (+18 points), Pakistan Tobacco (+11 points), EFU General Insurance (+9 points), Honda Atlas Cars (+8 points) and ICI (+8 points).
Meanwhile, stocks that contributed negatively were Engro (-28 points), Fauji Fertiliser Company (-28 points), Pakistan Petroleum (-27 points), Dawood Hercules (-22 points) and HBL (-18 points).
JS Global analyst Maaz Mulla said bulls lost control in Wednesday’s trading session as profit-booking was witnessed across the board. The benchmark index touched intra-day low of -372 points and closed at 33,933, down 226 points.
“On the news front, the Asian Development Bank (ADB) approved a $300-million emergency assistance loan to strengthen Pakistan’s public health response to the novel coronavirus and help meet basic needs of the vulnerable and poor segments of society,” Mulla said.
Moreover, profit-booking was noted in the pharmaceutical sector where The Searl Company (-3.8%), Ferozsons Laboratories (-7.5%) and AGP Limited (-4.5%) closed lower.
The Bank of Punjab (-3.6%) from the banking sector declared its 1QCY20 result, where the company posted earnings per share of Rs0.57, down 23% year-on-year.
“Moving forward, we expect the market to continue to exhibit similar behaviour and recommend investors to book profit in the short term,” the analyst said.
Overall, trading volumes decreased to 165.1 million shares compared with Tuesday’s tally of 247.8 million. The value of shares traded during the day was Rs6.9 billion.
Shares of 344 companies were traded. At the end of the day, 120 stocks closed higher, 212 declined and 12 remained unchanged.
Hum Network was the volume leader with 11.7 million shares, losing Re1 to close at Rs9.61. It was followed by Hascol Petroleum with 11.3 million shares, losing Rs0.27 to close at Rs14.80 and TRG Pakistan with 9.5 million shares, losing Rs0.43 to close at Rs25.81.
Foreign institutional investors were net sellers of Rs28.65 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ