Market watch: Bullish spell ends at PSX amid profit-taking

Benchmark KSE-100 index falls 293.99 points to settle at 39,577.62

KARACHI:

Investor sentiment turned bearish on Tuesday and pulled the KSE-100 index down by 294 points following six successive sessions in the green.

Encouraging trade data, released by the Ministry of Commerce during the trading session, failed to woo investors to make fresh stock purchases.

Market participants resorted to profit-taking and pulled their investments out of index-heavy sectors including automobile, oil, cement and fertiliser, which caused a substantial fall in the index.

Taking cue from Monday’s positive close, trading kicked off on an optimistic note in the morning and the index climbed above 40,000 points to a six-month high in early hours. However, volatility emerged later and triggered stock selling, which persisted by the end of the session and dragged the market downwards.

At close, the benchmark KSE-100 index recorded a decrease of 293.99 points, or 0.74%, to settle at 39,577.62 points.

Arif Habib Limited, in its report, stated that the market opened on a positive note with +87 points and added a total of 459 points to 40,330. However, profit-booking pulled the index down by 323 points (unadjusted).

“Selling activity was mainly noted in cement, exploration and production, refinery, oil marketing and chemical sectors whereas the banking sector largely remained unhurt,” it said.

Market volumes increased further to 594 million shares, which were one of the highest in recent times.

The cement sector led the volumes with trading in 100.3 million shares, followed by technology firms (64.8 million) and banks (57.7 million), the research house said.

JS Global analyst Danish Ladhani said the benchmark KSE-100 index closed at 39,577, down 0.7%, after touching a high and low of +459 and -343 points.

“The index started strong but succumbed to profit-taking in the second half where Lucky Cement (-2.8%), Kohat Cement (-3.4%), Cherat Cement (-2.4%), DG Khan Cement (-3.9%), Oil and Gas Development Company (-1.9%), and Pakistan Oilfields (-1.3%) in the cement and exploration and production sectors lost ground,” he said.

Crude oil slid in the international market amid concerns that a recent recovery in fuel demand could stall with a fresh wave of Covid-19 infections around the world.

Fauji Fertiliser (-1.2%), Lucky Cement (-2.8%), MCB (-0.2%), Oil and Gas Development Company (-1.9%), Pakistan Petroleum (+0.1%) and Pakistan Oilfields (-1.3%) were the major index movers.

Traded value inched up 3% to $158 million while volumes increased 10% to 594 million shares.

“Going forward, we expect the market to remain volatile with intra-day corrections. We recommend investors to sell on strength,” the analyst said.

Overall, trading volumes increased to 594 million shares compared with Monday’s tally of 539.3 million. The value of shares traded during the day was Rs26.5 billion.

Shares of 422 companies were traded. At the end of the day, 120 stocks closed higher, 282 declined and 20 remained unchanged.

TRG Pakistan was the volume leader with 45.6 million shares, losing Rs3.15 to close at Rs47.74. It was followed by Power Cement with 42.8 million shares, gaining Rs0.53 to close at Rs8.73 and Pak Elektron with 41.7 million shares, gaining Rs0.06 to close at Rs32.67.

Foreign institutional investors were net buyers of Rs335.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.