KSE-100 index drops on profit-booking

Sheds 424 points as IMF review, oil price worries weigh

KARACHI:

The KSE-100 index of Pakistan Stock Exchange (PSX) lost on Tuesday more than 400 points, weighed down by institutional profit-taking on concerns over the International Monetary Fund's (IMF) first review of its $7 billion Extended Fund Facility (EFF) and an impending decision on the rollover of China's energy debt.

Further pressure stemmed from falling global crude oil prices, rupee instability and a projected $2.5 billion shortfall in external financing. Despite an initial gain of 223 points, the index lost momentum, with Pakistan Petroleum Limited (PPL, -1.94%), Oil and Gas Development Company (OGDC, -1.49%), and Engro Corp (-2.06%) being the key drags.

Meanwhile, pharmaceutical stocks continued their upward march, led by gains in Haleon, Abbott Laboratories and GlaxoSmithKline.

"Stocks closed lower on institutional profit-taking amid worries over the outcome of IMF's first review, pending China's energy debt rollover and tax collection shortfall," said Ahsan Mehanti, Managing Director of Arif Habib Corp. Falling global crude oil prices, rupee instability and the $2.5 billion external financing gap played the role of catalysts in bearish activity, he added.

At the close of trading, the benchmark KSE-100 index recorded a decline of 423.76 points, or 0.45%, to 93,224.56.

Topline Securities, in its review, wrote that it was a day of profit-taking at the stock market. The KSE-100 index reached the intra-day high of 223 points and low of 755 points before settling at 93,224, down 424 points.

The negative session could be attributed to investors choosing to book profits in prominent stocks that had appreciated in recent sessions, it said. Major contributors to the decline were PPL (-1.94%), OGDC (-1.49%), Engro Corp (-2.06%), Systems Limited (-1.49%) and HBL (-1.53%), which collectively shaved 267 points off the index.

The pharmaceutical sector, however, continued to attract investor interest, where Haleon, Abbott Laboratories and GlaxoSmithKline closed higher than the previous sessions, extending their recent rally, Topline added. In its research report, AHL commented that Tuesday's trading session was volatile, with the KSE-100 index fluctuating around the 93,000-point mark.

A total of 28 stocks gained, while 69 declined. Among the top contributors to the index gains were Mari Petroleum (+3.82%), GlaxoSmithKline (+2.82%) and Fauji Fertiliser Company (+0.27%). On the downside, PPL fell 1.94%, OGDC dropped 1.49% and Engro Corp dipped 2.06%, weighing heavily on the index, it said.

In corporate developments, IGI Holdings approved the acquisition of a 6.04% stake in Packages Limited. Meanwhile, Fauji Foundation decided to withdraw its offer to acquire voting shares in Agha Steel Industries, which decreased 7.3%.

The key movers included Sui Southern Gas Company (+9.51%), Pakistan Refinery (+7.52%) and Sui Northern Gas Pipelines (+2.13%). The index's near-term support remained at 92,000, AHL added.

JS Global analyst Mubashir Anis Naviwala said that profit-taking prevailed across the board, with the KSE-100 index closing down by 424 points at 93,224.

"Looking ahead, we advise investors to view any pullbacks as a buying opportunity, particularly in the banking, auto and fertiliser sectors," the analyst added.

Overall trading volumes stood at 792.9 million shares compared with Monday's tally of 815.2 million. The value of shares traded during the day was Rs30.8 billion.

Shares of 454 companies were traded. Of these, 151 stocks closed higher, 242 fell and 61 remained unchanged.

Pakistan International Bulk Terminal was the volume leader with trading in 79.9 million shares, losing Rs0.26 to close at Rs8. It was followed by K-Electric with 71.8 million shares, gaining Rs0.15 to close at Rs5.13 and Pakistan Refinery with 56.4 million shares, gaining Rs1.88 to close at Rs26.88.

During the day, foreign investors sold shares worth Rs440.2 million, according to the NCCPL.