Profit-taking continues to dominate PSX

KARACHI:

Continuing the previous trend, profit-takers dominated proceedings at the Pakistan Stock Exchange (PSX) for the second straight session on Friday, pulling the KSE-100 index down by 335 points.

The bourse saw a mix of cautious optimism and volatility as the market initially rallied, reaching the intra-day peak of 85,773.83, before giving in to selling pressure later in the day.

Many stocks recorded decline following disappointing data, which showed that large-scale manufacturing (LSM) contracted 2.65% year-on-year in August 2024.

Similarly, in its annual report, the State Bank of Pakistan (SBP) projected a subdued growth of 2.5-3.5% for fiscal year 2024-25.

The KSE-100 slid to the intra-day low of 85,120.90 later in the afternoon, weighed down by profit-taking in sectors like exploration and production (E&P) and fertiliser.

"Stocks fell sharply amid dismal data showing a negative 2.65% year-on-year growth in LSM for August 2024 and the SBP's subdued growth projection of 2.5-3.5% for FY25," said Ahsan Mehanti, Managing Director of Arif Habib Corp.

"Weak global crude oil prices, ongoing foreign fund outflows and concerns over political uncertainty largely contributed to the bearish close at the PSX," he added.

At the close of trading, the benchmark KSE-100 index registered a loss of 335.34 points, or 0.39%, and settled at 85,250.09.

Topline Securities, in its report, wrote that the KSE-100 extended its downward trend from the previous session as the index touched the intra-day low of 464 points and closed down by 335 points.

Profit-taking persisted across various sectors during which investors booked gains after the recent upward movement, it said.

E&P and fertiliser sectors were the major laggards, losing 225 and 206 points respectively, due to lower-than-expected corporate results, which weighed heavily on the overall market sentiment, added Topline.

Arif Habib Limited (AHL), in its review, stated that the PSX recorded a marginal decline of 0.21% week-on-week. On Friday, 49 shares rose while 48 fell with Hub Power (+5.12%), Pakistan Tobacco (+6.42%) and Bank Alfalah (+1.31%) being the biggest contributors to the index gains.

Pakistan Oilfields reported 1QFY25 earnings per share (EPS) of Rs9.05, reflecting a 74% year-on-year decline and marking the lowest quarterly earnings since the Covid-19 pandemic (4QFY20).

On the LSM Index, nine out of 22 sectors experienced a negative growth during 2MFY25, which included pharmaceuticals, non-metallic mineral products, iron and steel products, chemicals and electrical equipment.

Despite the decline, AHL anticipated a gradual recovery in the LSM Index due to improving macroeconomic indicators such as rising demand, currency stability and the interest rate reversal cycle, all of which should enhance LSM production.

According to JS Global analyst Mohammed Waqar Iqbal, stocks opened positively but closed down by 335 points. Trading volumes dropped to 324 million shares.

Despite the initial optimism, investor sentiment shifted as the day progressed, contributing to the market's overall decline, he said and expected the index to remain flat in the near term due to the ongoing shift in asset allocation from fixed income to equities.

Overall trading volumes decreased to 323.9 million shares compared with Thursday's tally of 513.3 million. The value of shares traded during the day was Rs15.7 billion.

Shares of 445 companies were traded. Of these, 170 stocks closed higher, 206 declined and 69 remained unchanged.

Pakistan Refinery was the volume leader with trading in 28.5 million shares, losing Rs2.57 to close at Rs23.88. It was followed by Hub Power with 19.7 million shares, gaining Rs4.98 to close at Rs102.34 and WorldCall Telecom with 14.95 million shares, losing Rs0.01 to close at Rs1.20.

During the day, foreign investors sold shares worth Rs404.3 million, according to the NCCPL.