PSX loses earlier gains on profit-taking

Trading activity remained volatile at the Pakistan Stock Exchange (PSX) on Wednesday, which closed slightly lower, as a mix of investor optimism and caution prevailed.

After two days of sharp gains, including a record surge of over 10,000 points on Monday, the market saw mixed signals, driven by pre-budget uncertainty, sector-specific headwinds and profit-taking in different stocks. Earlier, trading opened on a positive note, buoyed by the strength in select blue chips. However, selling pressure emerged in the second half, when investors opted to book profit.

The KSE-100 index, which continuously fluctuated throughout the day, hit the intra-day high of 119,461 points and the low of 118,149.

Fertiliser, cement, banking and oil and gas sectors extended key support to the index gains. On the other side, a 10% month-on-month decline in car sales for April impacted investor sentiment while reports of stricter tax regulations for cement distributors weighed on construction-related stocks.

On the macro front, investor confidence got a lift from two significant developments. The International Monetary Fund (IMF) disbursed SDR 760 million ($1.023 billion) to the State Bank of Pakistan (SBP) under the Extended Fund Facility (EFF), which would be reflected in foreign currency reserves by May 16, and the MSCI's May 2025 review added three Pakistani companies namely DG Khan Cement, Maple Leaf Cement and Fauji Cement to its Frontier Markets Index, increasing the number of Pakistani firms to 26.

Arif Habib Corp MD Ahsan Mehanti wrote "stocks closed flat amid uncertainty ahead of the federal budget for FY26." Dismal car sales, which showed a 10% month-on-month decline in April, along with concerns over extensive tax regulations targeting cement distributors and rupee fluctuation 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 marginal loss of 39.36 points, or 0.03%, and settled at 118,536.53.

Topline Securities wrote in its review that after two consecutive sessions of a powerful bull-run, the bourse witnessed a hot-and-cold trading day, marked by heightened volatility and strategic profit-taking.

There was a tug of war between the gainers and losers. On the upside, heavyweights such as Engro Holdings, Fauji Fertiliser, Meezan Bank and United Bank led the charge, adding 470 points to the index. However, the rally lost some steam as Oil and Gas Development Company, MCB Bank, Bank AL Habib and Mari Petroleum dragged the index down by 354 points, added Topline.

Arif Habib Limited (AHL) noted that stocks closed flat following a sharp two-day rally that had lifted the benchmark index substantially. Some 42 shares closed in the green while 54 remained in the red.

Engro Holdings (+3.67%), Fauji Fertiliser (+0.97%) and United Bank (+0.92%) contributed the most to index gains, it said. JS Global analyst Muhammad Hasan Ather observed that IMF-Pakistan talks, focusing on budgetary measures and reforms, kept sentiment cautious, which resulted in selective profit-taking.

Moving forward, the market direction depended on IMF negotiations, fiscal clarity and economic policy shifts. While a favourable outcome could support further upside, any uncertainty may trigger volatility, Ather anticipated.

Overall trading volumes decreased to 609.1 million shares compared with Tuesday's tally of 684.3 million. The value of shares traded during the day stood at Rs41.9 billion.

Shares of 451 companies were traded. Of these, 207 stocks closed higher, 191 fell and 53 remained unchanged.

At-Tahur Limited was the volume leader with trading in 38.8 million shares, rising Rs4.08 to close at Rs44.84. It was followed by Fauji Cement with 36.2 million shares, gaining Rs0.33 to close at Rs47.86 and Sui Southern Gas Company with 32.4 million shares, higher by Rs3.28 to close at Rs36.07.

During the day, foreign investors sold shares worth Rs1.79 billion, the National Clearing Company reported.