Stocks pause amid profit-taking at highs

The Pakistan Stock Exchange (PSX) paused on Tuesday after touching a record high above the 170k barrier a day ago as early optimism vanished because of profit-taking by investors at elevated levels, pushing the benchmark index down by 294 points.

Initially, investors cheered a 50-basis-point reduction in the central bank's policy rate, which lifted the index to a new all-time intra-day high of 171,923 in early trading. However, it proved short-lived.

The market's tone gradually softened, with steady profit-taking in heavyweights in the exploration & production, energy, fertiliser and cement sectors. Towards close, the bourse dropped to the intra-day low of 170,192, before recouping some of the losses. At the end of trading, the benchmark KSE-100 index recorded a fall of 294.05 points, or 0.17%, to settle at 170,447.30.

Ismail Iqbal Securities commented that the benchmark index closed on a slightly negative note after a volatile session. The market opened on a positive footing and registered a new all-time intra-day high as investors initially celebrated the surprise rate cut. However, gains were eroded later in the session as volatility took hold. Stocks of oil & gas exploration companies, fertiliser and cement firms were the major laggards, cumulatively erasing 551 points from the index, it said.

KTrade Securities noted that the PSX saw a range-bound session as profit-taking capped recent gains. The KSE-100 index dipped 294 points, or 0.17%, to close at 170,447. Selling pressure was concentrated in oil & gas, fertiliser and cement stocks.

Fauji Fertiliser was the biggest drag on the index, while Systems Ltd, Pakistan Petroleum, Oil & Gas Development Company and Maple Leaf Cement also made a notable negative contribution. Despite the mild correction, market activity remained robust, with All-Share volumes reaching 1.18 billion shares, indicating healthy participation, it said.

Following State Bank's surprise 50-basis-point rate cut, the PSX delivered an unexpected performance by closing in the red compared to positive market expectations, said Arif Habib Limited (AHL) Deputy Head of Trading Ali Najib.

The market opened on a strong note, carrying forward the optimism from the central bank's rate cut versus capital market expectations of a status quo. Broad-based buying was witnessed during early trading, particularly in cyclical stocks, he said. However, likely institutional profit-taking near the day's highs weighed on sentiment, reversing early gains and pushing the benchmark into negative territory by the close.

In the petroleum sector, Najib mentioned, the government reduced high-speed diesel prices by Rs14 to Rs265.65 per litre for the second fortnight of December, while petrol prices were left unchanged at Rs263.45 per litre. The petroleum levy and oil marketing companies' margins remained intact, with minor adjustments in ex-refinery prices and the inland freight equalisation margin.

Overall trading volumes increased to 1.18 billion shares compared to Monday's tally of 905.7 million. The value of traded shares stood at Rs53.5 billion.

Shares of 482 companies were traded. Of these, 161 closed higher, 290 fell and 31 remained unchanged.

Pakistan International Bulk Terminal was the volume leader with trading in 101.8 million shares, gaining Rs0.56 to close at Rs17.75. It was followed by The Bank of Punjab with 88.7 million shares, rising Rs1.72 to close at Rs37.11 and TPL Properties with 80.4 million shares, edging up Rs0.08 to close at Rs12.56. Foreign investors sold shares worth a net Rs808.4 million, the NCCPL reported.