Market watch: Bourse turns bearish on profit-taking

Benchmark KSE-100 index sheds 377.93 points to settle at 44,666.57

KARACHI:

Bears returned to the Pakistan Stock Exchange on Tuesday as the benchmark KSE-100 index failed to sustain the previous day’s recovery and succumbed to across-the-board profit-taking.

As a result, the benchmark index offloaded 378 points in a volatile session.

Investor sentiment took a hit owing to a surge in trade deficit, which widened 100% in July-September 2021 on a year-on-year basis. Additionally, the drop in cement sales amid prevailing pressure on the rupee took a toll on the investment climate and market participants opted to trade cautiously.

The KSE-100 index, following a short-lived spike, entered the red zone within initial minutes and oscillated between positive and negative territories due to volatility.

The market remained range bound for most part of the day, however, a selling spree, emerging towards the end, increased the losses.

At close, the benchmark KSE-100 index recorded a decrease of 377.93 points, or 0.84%, to settle at 44,666.57.

In a report, Arif Habib Limited stated that the market lost further ground by shedding 451 points during the session and closed with a loss of 378 points.

Discussions with the International Monetary Fund (IMF) were ongoing with the hope of near-term resolution of issues and resumption of loan programme.

Besides, continuous pressure on the rupee against the US dollar caused concern amongst investors, especially foreigners who were selling equities.

Among technology stocks, Octopus hit its upper circuit whereas other tech stocks remained under pressure, especially TRG Pakistan which saw selling pressure despite anticipation of high earnings.

Sectors contributing to the performance included cement (-170 points), technology (-99 points), fertiliser (-45 points), banks (-23 points) and oil and gas marketing companies (-17 points).

Stocks that contributed positively to the index were Mari Petroleum Company (+74 points), United Bank Limited (+19 points), Hub Power Company (+18 points), Pakistan Services (+13 points) and Engro Polymer and Chemicals (+11 points).

Stocks that contributed negatively included Lucky Cement (-66 points), TRG Pakistan (-65 points), Oil and Gas Development Company (-34 points), Systems Limited (-27 points) and Maple Leaf Cement (-24 points), the report said.

JS Global analyst Maaz Mulla said that the KSE-100 index slid 378 points, closing the session at 44,667.

Major selling pressure was seen in the cement sector as coal prices continued to rise in the international market while cement dispatches fell over 12% in September.

 “Going forward, we recommend investors to remain cautious and wait for significant dips for further buying,” the analyst said.

Overall trading volumes increased to 334.7 million shares compared with Monday’s tally of 267.2 million. The value of shares traded during the day was Rs13.5 billion.

Shares of 564 companies were traded. At the end of the day, 211 stocks closed higher, 342 declined and 11 remained unchanged.

Telecard Limited was the volume leader with 30.4 million shares, gaining Rs0.76 to close at Rs19.95. It was followed by Azgard Nine with 19.6 million shares, losing Rs1.27 to close at Rs20.12 and Ghani Global Holdings with 18.6 million shares, gaining Rs1.62 to close at Rs39.43.

Foreign institutional investors were net buyers of Rs475.92 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.