Market watch: Profit-booking drags KSE-100 down

Benchmark index falls 137.09 points to settle at 46,248.45

KARACHI:

Bulls took a break at the Pakistan Stock Exchange on Monday as profit-booking pulled the benchmark KSE-100 index lower by 137 points.

Index-heavy cement and financial sectors faced modest selling, which fuelled the downtrend. A lack of positive triggers that could give direction to the market dented investor interest, leading to divestment of stockholdings, which erased early gains.

In the morning, trading began with a spike and the market inched closer to the 47,000-point mark. However, the rise proved short-lived and profit-booking by market participants erased the gains, pushing the index into the negative zone. The market’s decline deepened towards the end of session.

At close, the benchmark KSE-100 index recorded a decrease of 137.09 points, or 0.3%, to settle at 46,248.45 points.

In its report, Arif Habib Limited stated that the market rose towards 47,000 points and once again met with profit-booking at around 46,700, which pulled the index down by 137 points. “During the session, the index oscillated between +377 points and -197 points,” it said.

Refinery, fertiliser and chemical sectors remained in the limelight with buying activity whereas banking, exploration and production, oil and gas marketing and cement sectors recorded profit-booking.

The cement sector contributed to the initial surge, however, selling pressure brought stock prices below previous trading day’s closing prices, the report said.

JS Global analyst Danish Ladhani said the KSE-100 opened on a positive note, traded in the green, but came under pressure later in the day. It finally closed in the red.

The market touched a high and low of +377 and -197 points respectively, where the total traded volume was 693 million shares with sideboard stocks being the main contributors.

International Industries (-4%) in the steel sector and Pakistan Refinery (+0.6%) in the refinery sector announced their financial results. International Industries reported 1HFY21 consolidated earnings per share of Rs21.13 with cash payout of Rs3.5 per share.

Pressure was seen in the cement sector where Lucky Cement (-2.1%), Kohat Cement (-4.6%), Pioneer Cement (-1%) and DG Khan Cement (-1.7%) remained in the red.

On the economic front, the headline inflation declined to 5.65% year-on-year (down 0.21% month-on-month) in January 2021.

Moreover, hefty volumes were seen in Waves (+6%) as the company’s board of directors approved the submission of expression of interest for the acquisition of Heavy Electrical Complex from the government of Pakistan.

 “As per our recommendation, investors are recommended to sell on strength,” he said.

Overall, trading volumes dropped to 693.6 million shares compared with Friday’s tally of 840.3 million. The value of shares traded during the day was Rs30.5 billion.

Shares of 430 companies were traded. At the end of the day, 193 stocks closed higher, 219 declined and 18 remained unchanged.

Pakistan Refinery was the volume leader with 81.6 million shares, gaining Rs0.16 to close at Rs27.07. It was followed by K-Electric with 65.1 million shares, gaining Rs0.13 to close at Rs4.52 and Pakistan International Bulk Terminal with 62.1 million shares, gaining Rs0.42 to close at Rs13.47.

Foreign institutional investors were net sellers of Rs1.18 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.