Profit-taking at highs drags bourse down
Pakistan Stock Exchange started the week with selling pressure as it dropped over 200 points owing to political uncertainty and concerns over foreign selling following Supreme Court ruling in favour of the opposition in the case of reserved seats.
Initially, the market showed some promise, when the KSE-100 index reached the intra-day high of 82,463.05 points. However, the early optimism quickly evaporated as profit-taking kicked in, reversing the gains and dragging the market down.
The bearish sentiment was fueled by factors including uncertainty about the privatisation of state-owned enterprises (SOEs), government action to terminate power purchase agreements (PPAs) with the independent power producers (IPPs) and concerns over the terms of a new International Monetary Fund (IMF) loan programme.
Consequently, the index was unable to sustain the 82,000 mark as it fell to the intra-day low of 81,548.64 points. It recouped some of the losses and ended trading with a modest decline.
"Stocks closed lower on political uncertainty after the SC backed the opposition's bid for reserved seats in its detailed judgement and due to foreign selling concerns," said Ahsan Mehanti, Managing Director of Arif Habib Corp.
"Uncertainty over the privatisation of SOEs, government action on the IPPs' capacity payment issue for terminating PPAs and worries over the terms of the new IMF programme played the role of catalysts in bearish close at the PSX."
At the end of trading, the KSE-100 index recorded a drop of 223.95 points, or 0.27%, and settled at 81,850.50. Topline Securities, in its report, commented that the KSE-100 index closed the trading session with a decrease of 224 points. "Profit-taking was largely seen in Hub Power, Mari Petroleum, Pakistan Petroleum, Oil and Gas Development Company and Bank Alfalah, which collectively contributed to a fall of 634 points in the index," it said.
Arif Habib Limited (AHL) noted that spillover selling in the wake of FTSE rebalancing of indices kept the stock market under pressure.
Some 40 shares rose while 59 fell with Fauji Fertiliser (+7%), United Bank (+3.4%) and Engro Fertilisers (+2.78%) being the biggest upside contributors. Hub Power (-5.81%), Mari Petroleum (-5.98%) and Pakistan Petroleum (-2.93%) were the largest drags, it said.
Oil and Gas Development Company (-1.9%) announced FY24 earnings per share of Rs48.59, down 7% year-on-year (YoY) and Q4 earnings per share of Rs8.81, down 42% YoY, which were below expectations, AHL added.
JS Global analyst Mubashir Anis Naviwala noted that the stock market touched an all-time intra-day high, but profit-taking across the board prevailed almost throughout the day.
"Looking ahead, we recommend a buy-on-dips strategy, particularly in banking, exploration and production (E&P) and fertiliser sectors," the analyst added.
Overall trading volumes decreased to 400.3 million shares compared with Friday's tally of 482.4 million. The value of shares traded during the day came in at Rs18.7 billion.
Shares of 439 companies were traded. Of these, 143 stocks closed higher, 237 declined and 59 remained unchanged.
Pace (Pak) Ltd was the volume leader with trading in 30.4 million shares, losing Rs0.89 to close at Rs5.39. It was followed by WorldCall Telecom with 29.1 million shares, losing Rs0.03 to close at Rs1.28 and Oil and Gas Development Co with 23.1 million shares, losing Rs2.68 to close at Rs138.61.
During the day, foreign investors sold shares worth Rs890.8 million, according to the NCCPL.