PSX loses steam amid cautious trading

KSE-100 sheds 779 points as profit-taking, lack of catalyst weigh on sentiment

KARACHI:

The Pakistan Stock Exchange (PSX) ended lower on Tuesday as investors adopted a cautious stance amid a lacklustre trading environment, with the absence of a strong catalyst prompting profit-taking in key sectors.

The market opened on a positive note, with buying interest witnessed across cement, commercial banks, oil and gas exploration companies, oil marketing companies and power generation stocks. The bullish momentum helped the benchmark index climb to an intraday high of 179,405.56 points during the session. However, the early momentum failed to sustain as selling pressure emerged in the latter half, with the KSE-100 index touching a low of 177,674.37 points before settling at 177,692.92, down 778.95 points or 0.44%.

Investors largely remained on the sidelines, awaiting a fresh trigger that could provide stronger conviction about the sustainability of the country's improving macroeconomic outlook. Market participants attributed the decline to profit-booking after the index's recent strong performance, while also remaining cautious ahead of upcoming economic and fiscal developments. Despite the downturn, trading activity remained healthy as investors continued to reposition their portfolios.

Sentiment also remained cautious as regional geopolitical tensions continued to influence global markets, particularly amid concerns over energy price volatility.

According to KTrade Securities, the KSE-100 index closed at 177,692 points, declining 778 points or 0.44% in a largely lacklustre session as investors remained cautious amid the absence of any meaningful near-term catalyst. Trading activity remained reasonable, with 292 million shares exchanged. From a sectoral perspective, commercial banks and investment banks exerted the greatest pressure on the index. Major negative contributions came from United Bank, Bank Al Habib, Engro Holdings, Fauji Fertiliser, Bank Al Falah and National Bank, which collectively weighed on market performance.

On the positive side, gains in Oil and Gas Development Company (OGDC), Maple Leaf Cement and Pakistan Petroleum provided some support, though not enough to offset broader weakness. Going forward, market direction is likely to remain range-bound in the near term, with investor participation expected to stay selective until a fresh catalyst emerges from corporate earnings, macroeconomic developments or policy-related triggers, KTrade noted.

Arif Habib Limited (AHL) observed that the KSE-100 continued consolidating within the 177-179.5k support zone following a breach of 175k earlier in the month. Some 28 shares rose while 70 fell, with OGDC (+1.17%), Maple Leaf Cement (+2.52%) and Pakistan Petroleum (+0.7%) contributing the most to index gains. On the flip side, UBL (-1.86%), Bank Al Habib (-2.63%) and Engro Holdings (-0.96%) were the biggest index drags.

Meanwhile, Iranian President Masoud Pezeshkian has arrived in Islamabad to discuss greater cooperation in security, trade and other areas. The State Bank of Pakistan (SBP) will announce the next rate decision on July 27. Parliament has also approved the National Budget for FY27.

With Pakistan closed on Thursday and Friday on account of Ashura holidays, the KSE-100 is currently 0.69% down week-on-week and trading within last week's range to set up an "inside candle" which would indicate an increase in volatility next week, AHL predicted.

Cumulatively, trading volume decreased to 765.1 million shares from Monday's 807.4 million. The value of traded shares stood at Rs35.4 billion. In the ready market, shares of 493 companies were traded, with 146 closing higher, 308 falling and 39 unchanged. K-Electric was the volume leader with 83.5 million shares, gaining Rs0.22 to close at Rs8.42. Foreign investors sold shares worth Rs43.83 billion, the National Clearing Company reported.