Profit-taking pulls stock market down

KSE-100 index dips 250.73 points, settles at 63,919.85

KARACHI:

Pakistan Stock Exchange (PSX) extended its losing streak on Wednesday as it witnessed a mixed trading session that succumbed to profit-taking, ending the day slightly below the 64,000 mark with a loss of 250 points.

In the morning, trading started on a negative note but after taking a dip, the market quickly gained ground, led by buying interest in Pakistan Petroleum and Oil and Gas Development Company.

The momentum continued well after midday, resultantly, the KSE-100 index touched its intra-day high at 64,550.94 points.

However, investor sentiment received a blow in the absence of major positive triggers coupled with the prevailing political uncertainty. The market succumbed to late-session profit-booking in banking and fertiliser sectors and ended the session below the 64,000 mark.

“Stocks closed bearish due to late-session selling amid pre-poll uncertainty and foreign fund outflows,” said Arif Habib Corp MD Ahsan Mehanti.

“Mid-session support came on the back of upbeat data of home remittances that surged 13% year-on-year (YoY), or $282 million, and increase in global crude oil prices,” he said.

“Political uncertainty and worries about the State Bank of Pakistan’s (SBP) policy rate announcement this month amid surging inflation played the role of catalysts in bearish close of the market.”

At close, the benchmark KSE-100 index recorded a decrease of 250.73 points, or 0.39%, and settled at 63,919.85.

Topline Securities, in its report, noted that it was “another day of consolidation”.

Pakistan equities moved in both directions. Initially, the KSE-100 index hit the intra-day high at 64,551 (+380 points, or 0.59%), it said, adding that profit-taking forced the index to lose the earlier ground. Owing to investor selling, the PSX could not hold the 64,000 level.

Investors took profit in selective stocks of banking and fertiliser sectors in the backdrop of increasing noise on the political front and the absence of positive triggers. It marked the fifth consecutive negative session at the PSX.

Read Despite fall, PSX stays above 64,000 mark

Resultantly, Meezan Bank, Engro Corporation, Bank AL Habib, Engro Fertilisers and United Bank cumulatively lost 182 points, Topline said.

Arif Habib Limited (AHL), in its review, stated that “breaking down from 64,000 sets up a test of key near-term support at 63,000 before resuming higher towards 67,000”.

“Seasonal factors favour a rising market into February, which should coincide with a new high,” it said, adding that with two sessions to go this week, price action remained inside last week’s range.

JS Global analyst Muhammad Shuja Qureshi said that it was the third consecutive day of losses at the PSX this week.

“Investors are advised to adopt a cautious stance and accumulate value stocks on dips,” the analyst added.

Overall trading volumes increased to 636.2 million shares against Tuesday’s tally of 448.99 million. The value of shares traded during the day was Rs17.98 billion.

Shares of 361 companies were traded. Of these, 155 stocks closed higher, 183 dropped and 23 remained unchanged.

K-Electric was the volume leader with trading in 151.2 million shares, losing Rs0.03 to close at Rs5.72. It was followed by Hascol Petroleum with 67.98 million shares, gaining Rs0.53 to close at Rs8.53 and WorldCall Telecom with 42.1 million shares, remaining unchanged at Rs1.43.

Foreign investors were net buyers of shares worth Rs82.6 million, according to the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, January 11^th, 2024.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.