Market watch: Profit-taking pulls stock market down

Benchmark KSE-100 index drops 36.14 points to settle at 44,887.77

KARACHI:

The Pakistan Stock Exchange on Tuesday gave up all earlier gains and extended losses as investors opted for profit-booking following a rapid increase in Covid-19 cases in the country and soaring global crude oil prices.

Though the market got off to a positive start, encouraged by no change in monetary policy by the State Bank of Pakistan (SBP) a day earlier, it could not sustain the gains and succumbed to the pressure of profit-booking.

The benchmark KSE-100 index, despite remaining in the positive territory for most part of the day, dropped another 36 points to end the session in the red.

Fresh depreciation of the rupee against the greenback coupled with rising Covid-19 cases in the country and swelling international crude oil and commodity prices added to the market’s woes.

Earlier, trading kicked off on a positive note as investors hailed the State Bank’s monetary policy stance. The index touched intra-day high of 45,255 points in early hours of the session.

Later, the index stayed in the green zone, registering minor ups and downs. However, profit-taking towards the end of trading dragged the index down into the red zone.

At close, the benchmark KSE-100 index recorded a decline of 36.14 points, or 0.08%, to settle at 44,887.77.

Arif Habib Limited, in its report, stated that the market opened on a positive note as the Monetary Policy Committee (MPC) of the State Bank kept the policy rate unchanged at 9.75%.

Cement stocks were in the limelight due to expectations of improved earnings in the upcoming corporate results, it said.

The market stayed in the green zone but profit-taking was witnessed in the last trading hour, which led the index into the red zone due to an alarming rise in Covid-19 cases and mounting international oil prices, the report said.

Main board activity remained gloomy. On the flip side, activity continued to remain sideways as the market witnessed hefty volumes in third-tier stocks.

Sectors contributing to the performance included technology (-91 points), exploration and production (-39 points), chemical (-22 points), insurance (-8.5 points) and power (-6 points).

JS Global analyst Neelam Naz said that the market opened on a positive note amid status quo in the monetary policy announcement.

However, after touching intra-day high of 45,255 points, the market lost ground due to profit-taking and closed at 44,888, down 36 points day-on-day.

Major index laggards were Systems Limited, TRG Pakistan, Colgate Palmolive, Engro Corporation and Pakistan Petroleum. Major volume leaders were Waves Singer, TRG Pakistan, Treet Corporation, Cnergyico Pk and WorldCall Telecom.

“Going forward, the ongoing rollover week, falling international markets and any uncertainty on the International Monetary Fund (IMF) front could bring more weakness to the local market,” the analyst said, adding “we have a buy-on-dip stance”.

Overall trading volumes increased to 207 million shares compared with Monday’s tally of 160.2 million. The value of shares traded during the day was Rs8.1 billion.

Shares of 333 companies were traded. At the end of the day, 148 stocks closed higher, 161 declined and 24 remained unchanged.

Waves Singer was the volume leader with 20 million shares, gaining Rs0.52 to close at Rs15.5. It was followed by TRG Pakistan with 11.1 million shares, losing Rs3.75 to close at Rs77.14 and Treet Corporation with 9.4 million shares, losing Rs0.31 to close at Rs38.91.

Foreign institutional investors were net sellers of Rs352.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.