Market watch: Bourse drifts lower amid profit-booking

Benchmark KSE-100 index drops 198.92 points to settle at 40,281.96

KARACHI:

After a day’s respite, bears once again dominated the stock market on Wednesday as selling pressure weighed on investors’ sentiment.

Despite a host of positive triggers, such as encouraging cement and petroleum product sales, the benchmark KSE-100 index succumbed to profit-booking and dropped nearly 200 points in a turbulent session.

Market participants remained cautious about the outcome of US presidential election and prevailing economic uncertainty due to rising Covid-19 cases domestically and globally, and opted to remain on the sidelines.

Earlier, trading kicked off on a positive note, however, the bull-run could not be sustained and the index retreated into the red zone. Trading remained choppy with the index swinging between red and green zones but after midday the trend remained negative.

At close, the benchmark KSE-100 index recorded a decrease of 198.92 points, or 0.49%, to settle at 40,281.96 points.

Arif Habib Limited, in its report, stated that the market opened on a positive note and added 434 points in addition to Tuesday’s jump of 1,368 points in the KSE-100 index.

“However, profit-booking kept a check on additional gains, restricting the index movement in positive zone between +150 points and +400 points in early hours,” it said. “Exploration and production, cement, banking and fertiliser stocks contributed in that phase.”

The report added that US elections also grabbed the attention of domestic investors, who conjectured prospects of Trump’s victory and its impact on global stock markets as well as commodity markets.

Selling pressure pushed key stocks in banking, cement, oil and gas marketing sectors into the red.

Sectors contributing to the performance included banks (-88 points), cement (-45 points), power (-41 points), pharma (-25 points) and oil and gas marketing (-21 points).

Individually, stocks that contributed positively to the index included Fauji Fertiliser Bin Qasim (+14 points), Oil and Gas Development Company (+12 points), Millat Tractors (+11 points), TRG Pakistan (+10 points) and Colgate-Palmolive (+10 points).

Stocks that contributed negatively were HBL (-38 points), Hubco (-37 points), UBL (-27 points), Pakistan State Oil (-17 points) and Bank AL Habib (-17 points).

JS Global analyst Danish Ladhani said the benchmark KSE-100 index closed in the red after touching intraday high and low of +433 and -257 points. It closed the session at 40,282, down 0.5%.

“Profit-taking was witnessed at the bourse after a brief rally amid US elections,” he added.

HBL (-1.7%), Hubco (-2%), UBL (-2.1%), Pakistan State Oil (-1.8%), Searle (-2.8%), Maple Leaf Cement (-2%) and DG Khan Cement (-1.7%) cumulatively erased 153 points from the index.

“The market shall remain bullish despite political uncertainty and increasing corona cases,” the analyst said, adding, “We recommend investors to book profit on the higher side and wait for any sharp dips to accumulate value stocks.”

Overall, trading volumes rose to 427.8 million shares compared with Tuesday’s tally of 383.9 million. The value of shares traded during the day was Rs13.9 billion.

Shares of 393 companies were traded. At the end of the day, 147 stocks closed higher, 234 declined and 12 remained unchanged.

Unity Foods was the volume leader with 47.7 million shares, losing Rs0.94 to close at Rs23.2. It was followed by Fauji Foods with 34.8 million shares, gaining Rs0.86 to close at Rs15.75 and Hascol Petroleum with 30.3 million shares, losing Rs0.03 to close at Rs14.8.

Foreign institutional investors were net sellers of Rs237.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.