Profit-taking prevents PSX from crossing 66k

KARACHI:

Pakistan Stock Exchange (PSX) on Thursday gave up earlier gains as profit-taking kicked in, which snapped a three-day bull-run.

Earlier, trading commenced with a spike, when the KSE-100 index touched the intra-day high of 66,196.23 points over a staff-level agreement between the International Monetary Fund (IMF) and Pakistan.

However, the market could not sustain the gains and succumbed to the pressure of profit-booking.

A surge in T-bill yields in Wednesday’s auction undermined investors’ interest in the bourse, dragging the index below 66,000 points into negative territory. Resultantly, it hit the intra-day low of 65,326.01 towards the end of the session and closed in the red.

“Stocks closed bearish on a weak economic outlook,” said Ahsan Mehanti, MD of Arif Habib Corp. “Surge in government’s treasury bond yields up to 60 basis points, dismal data of foreign direct investment that dropped 17.1% to $820.6 million in Jul-Feb FY24 and external financing challenges played the role of catalysts in bearish close at the PSX.”

At close, the benchmark KSE-100 index recorded a decrease of 314.39 points, or 0.48%, and settled at 65,417.40. Topline Securities’ Deputy Head of Sales considered “66,000 a stumbling block for the PSX”.

Pakistan equities initiated trading on a positive note. However, the benchmark index could not withstand the pressure at 66,000 due to profit-taking at the day’s high, he said. Resultantly, the KSE-100 entered the negative territory and closed at 65,417.

Increase in T-bills’ yields could likely be the reason for Thursday’s market reaction as it dented investors’ confidence a bit about the commencement of monetary easing, he said.

Exploration and production (E&P), technology and cement sectors contributed negatively to the index as Pakistan Petroleum, Systems Limited, Oil and Gas Development Company, Lucky Cement and Pioneer Cement lost 185 points.

On the flip side, National Bank of Pakistan (NBP), Fauji Fertiliser Company and MCB Bank saw some buying interest as they added 102 points. Arif Habib Limited (AHL), in its report, commented that the “day’s high at 66,196 was met with excess supply that forced yet another retreat and kept the resistance at 66,000 intact”.

The Supreme Court dismissed a review application of NBP (+7.5%) pertaining to the payment of pensions to its retired employees. Dividends would now potentially be back on the table, which had been suspended since 2017 because of the case, it said.

Pakistan International Airlines (+7.5%) saw its sixth consecutive limit-up day. “For now, the index remains stuck between 65,000-66,000,” the AHL report added.

Overall trading volumes increased to 389.7 million shares against Wednesday’s tally of 341.8 million. The value of shares traded during the day was Rs11.3 billion.

Shares of 357 companies were traded. Of these, 115 stocks closed higher, 221 dropped and 21 remained unchanged.

Pakistan Telecommunication Company was the volume leader with trading in 52.9 million shares, losing Rs0.55 to close at Rs15.84. It was followed by Pakistan International Bulk Terminal with 41.98 million shares, gaining Rs0.1 to close at Rs6.05 and The Bank of Punjab with 29.1 million shares, gaining Rs0.16 to close at Rs5.44.

Foreign investors were net buyers of shares worth Rs500.3 million, according to the NCCPL.

Published in The Express Tribune, March 22^nd, 2024.

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