PSX rally falters as profit-booking prevails

Index retreats nearly 1,600 points amid broad-based stock selling

KARACHI:

Following a three-day winning streak during which a couple of records were eclipsed, the Pakistan Stock Exchange (PSX) saw a reversal of trend on Wednesday as selling pressure wiped out early gains. As a result, the benchmark KSE-100 index dived nearly 1,600 points, reflecting widespread selling across key sectors.

Earlier, trading opened on a relatively steady note, with the index edging higher to the intra-day peak of 189,523. The optimism proved short-lived as profit-booking emerged before midday, which erased all the early gains. Stock offloading intensified towards close, dragging the index down to the intra-day low of 186,627.

Uncertainty about macroeconomic conditions, fiscal measures and the upcoming key policy decisions impacted market behaviour, prompting investors to trim positions and limit exposure. At close, the KSE-100 index settled at 187,033.27, down 1,588.52 points, or 0.84%.

KTrade Securities' equity trader Ahmed Sheraz commented that the PSX witnessed profit-taking during Wednesday's session, when the KSE-100 closed at 187,033, down 1,589 points. Selling pressure emerged due primarily to institutional activity as investors moved to lock in recent gains ahead of next week's monetary policy announcement.

Heavyweight stocks such as Meezan Bank, Engro Holdings, MCB Bank, Habib Bank, Systems Limited, United Bank and Pakistan State Oil ended the day in the red. Market activity reflected broad-based profit-taking rather than stock-specific weakness, he said.

Among individual sectors, commercial banks, investment banks and technology firms underperformed, contributing to the overall negative sentiment. Given the upcoming futures rollover and the monetary policy decision scheduled for Monday, Sheraz expects the bourse to stay range bound in the coming sessions.

JS Global analyst Nawaz Ali stated that after a few bullish sessions, bears returned to the PSX as investors preferred to book profits at higher levels. The KSE-100 closed down by 1,589 points at 187,033.

Selling was witnessed almost across the board where major contribution to the index's decline came from banks and technology stocks. Valuations remained attractive while market was expecting another rate cut in the upcoming monetary policy, Ali said and advised investors to adopt a "buy-on-dips" strategy with focus on oil & gas and banking stocks.

Arif Habib Ltd Deputy Head of Trading Ali Najib observed that the market opened on a strong footing, when the benchmark index touched the intra-day high of 189,523 (+902 points). However, profit-takers capitalised on the gains, dragging the index into negative territory by the close.

On the corporate side, Lotte Chemical announced an interim cash dividend of Rs5 per share (50%) for the year ended December 31, 2025. Meanwhile, Fitch Ratings affirmed Pakistan's long-term sovereign rating at 'B-' and assigned a recovery rating of 'RR4', following the removal of ratings from Under Criteria Observation. The move reflects the application of Fitch's new sovereign rating criteria, effective September 2025, he said. Najib believes that post Wednesday's profit-taking, the market is likely to consolidate within the 185-190k range before resuming any further upside.

Topline Securities remarked that the local bourse witnessed a bout of profit-booking as investors sought to maximise recent gains, leading to a volatile session. Select index heavyweights such as Pakistan Petroleum, Sazgar Engineering and National Bank provided some respite by contributing 135 points. However, selling in Meezan Bank, Engro Holdings, MCB Bank, Habib Bank and Systems Ltd outweighed those gains, shaving 792 points off the index, added Topline.

Overall trading volumes increased to 1.3 billion shares compared with Tuesday's tally of 1.2 billion. The value of traded shares stood at Rs69.6 billion.

Shares of 488 companies were traded. Of these, 118 stocks closed higher, 331 dropped and 39 remained unchanged.

K-Electric led the volumes chart with trading in 263.2 million shares, gaining Rs0.26 to close at Rs7.01. It was followed by Hascol Petroleum with 100.8 million shares, rising Rs0.58 to close at Rs28.05 and Fauji Foods with 75 million shares, climbing Rs0.67 to close at Rs23.17. Foreign investors sold shares worth Rs631.3 million, according to NCCPL.