PSX falls amid post-earnings consolidation

KARACHI:

The stock market on Wednesday retreated from highs, losing over 280 points to settle just above 92,000 as investors consolidated positions following the corporate earnings season.

Market sentiment was dampened by concerns over rupee volatility, a drop in global crude oil prices and uncertainty surrounding the outcome of the International Monetary Fund's (IMF) first review of the Extended Fund Facility (EFF) amid a tax collection shortfall and outstanding Chinese energy debt.

Experts highlighted those economic pressures as key factors behind the bearish close of the market. There were limited gains above 92,000, with the KSE-100 index constrained by heavy profit-taking.

"Stocks closed sharply lower amid consolidation post-earnings season," said Ahsan Mehanti, Managing Director of Arif Habib Corp.

Rupee instability, weak global crude prices and uncertainty over the outcome of IMF's first review of the EFF amid tax collection shortfall and pending Chinese energy debt payment played the role of catalysts in bearish close at the PSX, he added.

At the end of trading, the benchmark KSE-100 index posted a decrease of 282.88 points, or 0.31%, and settled at 92,021.44.

Topline Securities, in its review, said that the market showed notable volatility, with the KSE-100 index reaching the peak of 92,967 and dipping to the low of 91,891 as investors capitalised on profit-taking opportunities in large-cap stocks.

The index was weighed down by negative contributions from Systems Limited, UBL, Bank AL Habib, Pakistan Petroleum Limited (PPL) and Oil and Gas Development Company (OGDC), which collectively erased 339 points.

On the other hand, Lucky Cement, Sazgar Engineering and Kohat Cement helped offset some of the losses, adding 94 points to the index.

Trading activity remained robust, with 889 million shares traded, amounting to Rs30 billion, Topline added.

Arif Habib Limited, in its report, stated that supply pressure above 92,000 limited gains, leading to a decline in the KSE-100 by the end of trading.

A total of 45 stocks advanced, while 51 declined. Among the top contributors to the index's upside were Lucky Cement (+1.51%), Sazgar Engineering (+3.63%) and The Bank of Punjab (+10.11%).

Conversely, Systems Limited (-4.7%), United Bank Limited (-1.8%) and Bank AL Habib (-1.26%) were the largest drags on the index.

Maple Leaf Cement (+2.21%) announced its offer to acquire a 37.86% stake in Agritech Limited (equivalent to 160.8 million shares) through a competitive bid at a price of Rs39 per share, AHL said.

"Support for the index now rises to the 90,000 level, which is expected to allow for further consolidation before any potential upward momentum resumes," it added.

JS Global analyst Mohammed Waqar Iqbal wrote that US elections took centre stage as Trump's anticipated victory triggered a selling frenzy among market participants, sending the KSE-100 into a sharp reversal, which ended in the red.

"Looking ahead, we recommend a cautious approach at current levels," he said. "Investors may find opportunities during market pullbacks, especially in cyclical stocks that historically perform well during periods of economic recovery."

Overall trading volumes increased to 889.2 million shares compared with Tuesday's tally of 752.7 million. The value of shares traded during the day was Rs30.5 billion.

Shares of 452 companies were traded. Of these, 201 stocks closed higher, 200 fell and 51 remained unchanged.

The Bank of Punjab was the volume leader with trading in 88.7 million shares, gaining Rs0.57 to close at Rs6.21. It was followed by Cnergyico PK with 71.6 million shares, gaining Rs0.25 to close at Rs4.11 and Power Cement with 39.2 million shares, losing Rs0.59 to close at Rs7.20.

During the day, foreign investors sold shares worth Rs7.25 million, according to the NCCPL.