Market watch: PSX snaps four-day rally on profit-booking

Benchmark KSE-100 index decreases 336.9 points to settle at 41,199.02

KARACHI:

A four-day winning streak ended at the Pakistan Stock Exchange on Thursday as the KSE-100 index succumbed to profit-taking and dropped 337 points owing to uncertainty about the ongoing Financial Action Task Force (FATF) plenary meeting.

The three-day FATF session, scheduled to conclude on Friday after the close of stock market, will determine whether to put Pakistan on white list.

Investor participation contracted significantly at the bourse compared to the previous session as they chose to trade cautiously ahead of the FATF verdict.

A plunge in global oil prices on Wednesday, which dipped owing to a surge in inventories, took a toll on the two oil sectors at the bourse and both closed the day entirely in the red.

Earlier, trading kicked off on a positive note and the market climbed in initial hours. However, the increase was short-lived as participants resorted to profit-booking, thus eroding the gains and dragging the index downwards.

The bourse fell steadily till the close of trading. A few attempts were made to lift the KSE-100 index upwards, however, they proved futile.

At close, the benchmark KSE-100 index recorded a decrease of 336.90 points, or 0.81%, to settle at 41,199.02 points.

Arif Habib Limited, in its report, stated that the market opened on a positive note with +50 points and following the momentum since the beginning of the week, the index added a total of 282 points during the session.

Profit-booking, however, brought the index down by 448 points and it closed the session at -337 points.

Rather than due to any negative development on the economic or political front, the profit-booking was largely an outcome of risk taking at the beginning of the week that paid well on Wednesday and Thursday.

FATF decision would be announced post-market closure on Friday evening and would have an impact on Monday next week, the report said.

JS Global analyst Danish Ladhani said the benchmark KSE-100 index lost 337 points after touching high and low of +282 and -448 points. It closed at 41,199.

“The market remained bearish with low volumes as compared to the previous day amid the result season,” he said. “Moreover, political uncertainty still prevails. Investors should keep an eye on the FATF meeting as well.”

Hubco (-4%), Oil and Gas Development Company (-2.7%), Pakistan Petroleum (-2.5%), HBL (-0.4%), Pakistan Oilfields (-1.9%), MCB Bank (-1%) and Bank Alfalah (-3.4%) contributed to the negative close.

Faysal Bank (-2.3%) in the financial sector reported consolidated 9MCY20 earnings per share (EPS) of Rs3.64 against Rs2.90 in the same period of last year with no cash payout.

Askari Bank (+3.2%) reported consolidated 9MCY20 EPS of Rs6.50 against Rs3.48 in the corresponding period of last year with no payout.

Moreover, Hascol Petroleum (-5.9%) closed nearly limit down as the company was challenging an order passed by the Oil and Gas Regulatory Authority (Ogra).

Traded value stood at $107 million, down 21% and volumes came in at 500 million shares, down 24%.

“Going forward, we expect the market to remain under pressure amid the result season, and recommend investors to sell on strength,” the analyst said.

Overall, trading volumes dropped to 500.1 million shares compared with Wednesday’s tally of 661.3 million. The value of shares traded during the day was Rs17.3 billion.

Shares of 408 companies were traded. At the end of the day, 124 stocks closed higher, 261 declined and 23 remained unchanged.

Unity Foods was the volume leader with 61.3 million shares, gaining Rs0.77 to close at Rs21.77. It was followed by Pakistan International Bulk Terminal with 56.3 million shares, losing Rs0.88 to close at Rs13.08 and Maple Leaf Cement with 44.5 million shares, gaining Rs1.36 to close at Rs40.74.

Foreign institutional investors were net sellers of Rs282.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.