Profit-taking drags bourse down

KARACHI:

Pakistan Stock Exchange (PSX) started the week on Monday with a volatile trading session as bulls and bears battled for control of the market, which closed with modest losses amid a pessimistic economic outlook.

In the morning, the KSE-100 index commenced proceedings on a robust note, reaching its intra-day high of 78,382.04 points. However, as the day progressed, profit-taking by investors dragged the market into the negative zone.

Key factors contributing to the bearish sentiment included political instability and uncertainty about the International Monetary Fund's (IMF) approval of power subsidy in Punjab.

Additionally, the unsettled foreign exchange dues of independent power producers (IPPs), a potential shortfall in tax collection and the surging public debt exacerbated investor woes.

Consequently, the index fell below the 78,000 mark and hit the intra-day low of 77,566.62 points. Despite efforts to recover the lost ground, the market ended trading with modest losses.

"Stocks closed under pressure on a weak economic outlook," said Ahsan Mehanti, MD of Arif Habib Corp. "Political noise, uncertainty over IMF's approval of power subsidy in Punjab, economic uncertainty amid the unsettled forex dues of IPPs, shortfall in tax collection and surging government debt played the role of catalysts in bearish close at the PSX."

At the end of trading, the benchmark KSE-100 index posted a decline of 214.97 points, or 0.28%, and settled at 77,830.34.

Topline Securities, in its report, mentioned that Pakistan equities experienced a mixed trading session as bullish and bearish forces wrestled for control throughout the day.

"The session began on a positive note but soon saw profit-taking by investors, pushing the index into negative territory," it said.

Bank AL Habib, Fauji Fertiliser, Hub Power, Pakistan Petroleum Limited and Service Industries collectively added 173 points to the KSE-100 index. On the contrary, profit-taking in Mari Petroleum, Millat Tractors, Lucky Cement and MCB Bank erased 194 points, Topline added.

Arif Habib Limited (AHL), in its report, observed that the week started with more whipsaw around 78k as the KSE-100 lost 0.28% day-on-day.

Some 28 shares rose while 64 fell on the index with Bank Alfalah (+3.38%), Fauji Fertiliser (+0.83%) and Hub Power (+0.53%) being the biggest contributors to the index gains, AHL said, adding that Mari Petroleum (-2.89%), Millat Tractors (-3.17%) and Lucky Cement (-1.36%) were the largest drags.

JS Global analyst Mohammed Waqar Iqbal commented "the market opened positively with the index reaching its intra-day high of 78,382 points (+336)". However, profit-taking at higher levels, coupled with intensified selling pressure due to rumours of delay in the IMF programme, led to the decline.

"Moving forward, we recommend investors to adopt a 'buy-on-dips' strategy, focusing on opportunities in cement, fertiliser and technology sectors," the analyst added.

Overall trading volumes decreased to 471.7 million shares compared with Friday's tally of 600.7 million. The value of shares traded during the day was Rs16.9 billion.

Shares of 441 companies were traded. Of these, 115 stocks closed higher, 275 fell and 51 remained unchanged.

Kohinoor Spinning Mills was the volume leader with trading in 134.9 million shares, losing Rs1.01 to close at Rs9.27. It was followed by Yousuf Weaving Mills with 43.55 million shares, losing Rs0.98 to close at Rs5.89 and Flying Cement with 15.1 million shares, gaining Rs0.58 to close at Rs10.96.

Foreign investors were net buyers of shares worth Rs103.9 million, according to the NCCPL.