PSX falls nearly 1,200 points on profit-taking

Pakistan Stock Exchange (PSX) ended sharply lower on Tuesday as investors indulged in broad-based profit-taking, while weak sentiment across major Asian equity markets further dampened buying activity.

After opening on a firm note, the benchmark KSE-100 index climbed 375 points in early trading, touching the intra-day high of 188,126.68. However, the gains proved short-lived as selling pressure intensified, pulling the market into negative territory. The index settled at 186,255.55, down 1,199.14 points, or 0.64%.

Investors remained cautious as major Asian markets traded lower, with losses in Japan, South Korea and Taiwan triggering the trimming of positions across regional equities. The subdued global mood, coupled with domestic profit-taking, kept the PSX under pressure.

Selling was witnessed in key sectors such as auto assemblers, cement, commercial banks, fertiliser, oil and gas exploration, oil marketing companies, power generation and refineries.

The market touched the intra-day low of 186,189.21 before recovering marginally by the close of trading. Analysts said the decline was primarily driven by profit-taking after the recent strong rally, while the negative trend across Asian markets encouraged investors to adopt a cautious stance. They added that the PSX's medium-term outlook remained supported by improving economic indicators, although near-term movement was likely to be driven by earnings expectations and institutional flows.

"Profit-taking by investors is weighing on the market as the KSE-100 index trades close to its all-time high," AKD Securities' Director Research Mohammed Awais Ashraf told The Express Tribune. However, a comfortable external account position due to the current account surplus and Pakistan's successful re-entry into the global bond market, especially the world's second-largest market through the issuance of Panda Bonds, along with focus on structural reforms would keep equities in the limelight, he said.

Additionally, the declining fixed-income yields will make the case stronger for equities trading at a cheaper forward price-to-earnings ratio of 6.8x. "We anticipate that sectors benefiting from monetary easing and structural reforms, particularly related to the energy chain, will remain prominent," said Ashraf.

According to Arif Habib Limited (AHL), stock selling emerged around the 188,000 level following the recent rapid rise. Only 30 shares rose while 70 fell, with Bank AL Habib (+2.54%), Habib Metropolitan Bank (+1.08%) and Ibrahim Fibres (+10%) contributing the most to the index gains. On the other hand, Fauji Fertiliser Company (-0.90%), Pakistan Petroleum (-2.31%) and UBL (-0.88%) were the biggest index drags.

Among corporate news, Select Technologies raised Rs1.3 billion as it got offers for 38.4 million shares versus 22.2 million offered in the public subscription. Also, the Engro Vopak Terminal was working with S&P Global Energy to initiate a feasibility study for Pakistan's first refrigerated liquefied petroleum gas (LPG) import and storage facility.

Meanwhile, the government plans to gradually reduce its reliance on commercial banks for financing by expanding access to government securities for non-bank financial institutions through digital investment platforms. AHL expects index support to hold between the 185.5k-186k range and continue to advance to the 190k target.

KTrade Securities mentioned that the index closed down 1,199 points as investors booked profits after the recent rally. Selling was concentrated in the oil & gas, fertiliser and power sectors, with Fauji Fertiliser, Pakistan Petroleum, UBL, OGDC and Lucky Cement weighing most on the index, while Bank AL Habib lent the biggest support.

Analysts said the decline reflected healthy profit-taking rather than a shift in market fundamentals, with sentiment supported by improving macroeconomic conditions, lower oil prices and the approaching earnings season, KTrade wrote.

Overall trading volumes increased to 984.8 million shares against Monday's total of 888.4 million. The value of traded shares stood at Rs45.7 billion.

TPL REIT Fund I was the volume leader with trading in 75.7 million shares, rising Rs0.12 to close at Rs10.63. Foreign investors sold shares worth Rs34.5 million, the National Clearing Company reported.