Profit-taking brings record rally to an end

KSE-100 slips below 91,000 as investors sell stocks amid uncertainty

KARACHI:

After an impressive record-breaking streak, the Pakistan Stock Exchange (PSX) faced a challenging trading session on Wednesday, where investors resorted to profit-taking and pushed the KSE-100 index down by more than 550 points.

Earlier in the day, the KSE-100 index reached the peak of 91,872.63 points, but later it fell sharply as investors offloaded their stockholdings to book profit at higher valuations. The market's volatility was also influenced by speculation ahead of a T-bills' auction, which may give clearer signs of future interest rate movements.

"Stocks closed under pressure on institutional profit-taking in overbought shares," said Ahsan Mehanti, Managing Director of Arif Habib Corp. He added that the rising industrial gas tariff, rupee instability and concerns about the outcome of guarantees sought by Saudi investors regarding policy consistency before making a $2 billion investment played the role of catalysts in bearish close at the PSX.

At the end of trading, the benchmark KSE-100 index recorded a drop of 577.52 points, or 0.64%, and settled at 90,286.57. Topline Securities, in its market review, wrote that the PSX witnessed a turbulent trading session, with the benchmark index oscillating between the high of 1,008 points and low of 860 points. Ultimately, the index closed at 90,286, reflecting a decline of 577 points.

"This downturn was primarily driven by investors engaging in profit-taking, seizing the opportunity to lock in recent gains," it said.

A key factor influencing the market behaviour was the anticipation ahead of the T-bills' auction, being closely monitored by the investors. The auction was expected to provide further clarity about the direction of interest rate, which could play a crucial role in shaping near-term market dynamics, said Topline.

During the day, key contributors to the index were Systems Limited, Pakistan Petroleum, GlaxoSmithKline, Engro Fertilisers and Allied Bank, which together added 264 points. However, the positive momentum was outweighed by the performance of major laggards such as Fauji Fertiliser Company, National Bank of Pakistan (NBP), Hubco, United Bank Limited and Habib Bank, which collectively shaved 360 points off the index.

Arif Habib Limited (AHL), in its report, said the benchmark index faced resistance at the top of its current price channel. Out of the active stocks, 36 posted gains while 61 fell. Notable contributors to the index gains included Systems Limited (+4.07%), Pakistan Petroleum (+2.68%) and Mehmood Textile Mills (+9.5%). On the other hand, the largest drags were Fauji Fertiliser Company (-1.8%), NBP (-6.75%) and Hub Power (-1.73%).

NBP reported earnings per share (EPS) of Rs1.67 for nine months ended September 30, 2024, a significant decrease of 91% year-over-year. Hub Power announced EPS of Rs14.74 for the first quarter of fiscal year 2025, reflecting a 12% year-over-year increase. No dividend was issued by the company.

The brokerage house added that Pakistan received only one bid for Pakistan International Airlines (PIA) as five other consortia abstained from participating in the privatisation process.

Overall trading activity was robust, with a volume of 614.6 million shares compared with Tuesday's tally of 602.8 million. The value of shares traded came in at Rs27.3 billion.

Shares of 446 companies were traded. Of these, 158 stocks closed higher, 235 fell and 53 remained unchanged.

Silkbank stood out as the most actively traded stock, with 68.5 million shares changing hands, gaining Rs0.1 to close at Rs1.18. It was followed by The Searle Company with 26.7 million shares, losing Rs3.93 to close at Rs65.33 and WorldCall Telecom with 22.7 million shares, losing Rs0.03 to close at Rs1.24. During the day, foreign investors bought shares worth Rs44.2 million, according to the NCCPL.