As expected, investors resorted to profit-booking at the Pakistan Stock Exchange (PSX) on Monday after a prolonged record-breaking rally following reports of a 10% decline in remittances and an increase in industrial energy tariffs.
In the morning, trading started off on a positive note and the market soon hit its intra-day high at 66,564.04 points, reflecting the surge over the past few sessions.
However, the positive momentum did not last long as the KSE-100 index declined rapidly when investors opted for profit-taking, particularly in power, oil marketing companies (OMCs) and banking sectors.
Consequently, the index touched its intra-day low at 65,128.99 points before midday. From here onwards, the bourse picked up once again, but it was not able to fully recover all the losses.
Reports of a decline in cement sales and apprehensions about the government’s unsustainable debt along with the challenge of debt restructuring fueled the negative sentiment.
Ultimately, the index closed the day with modest losses of over 200 points but managed to stay above the 66,000 mark.
“Pressure emerged at the PSX on institutional profit-taking after reports of 10% year-on-year fall in remittances for Jul-Nov 2023 at $11.045 billion and government’s decision to further raise industrial power tariffs to resolve the Rs4.5 trillion circular debt crisis in the energy sector,” said Arif Habib Corp MD Ahsan Mehanti.
“Dismal data on cement sales that fell further in winter season, concerns over the unsustainable government debt and painful domestic debt restructuring played the role of catalysts in bearish close of the market.”
At close, the benchmark KSE-100 index recorded losses of 211.31 points, or 0.32%, and settled at 66,012.33.
Topline Securities wrote that “bulls felt Monday blues after having a massive show of strength for the last six consecutive days.”
“The day witnessed strong headwinds just after the opening bell as investors opted for profit-taking across the board,” it said.
Read: Galloping PSX index
Power, OMCs and banking sectors came under considerable selling pressure where Hub Power, Habib Bank, Meezan Bank, Pakistan State Oil and United Bank pulled the index down by 396 points.
On the flip side, Fauji Fertiliser, Mari Petroleum and Engro Fertilisers saw some buying interest as they added 245 points, Topline added. Arif Habib Limited (AHL), in its report, said that there was selling pressure at the start of the week with a 2% intra-day decline before closing down modestly.
“Advancers-to-decliners’ ratio stood at 59:38. Fauji Fertiliser (+3.67%), Mari Petroleum (+4.91%) and Engro Fertilisers (+3.61%) were the largest contributors to the day’s gains while Hub Power (-3.1%), Habib Bank (-3.86%) and Meezan Bank (-3.03%) were the largest drags,” AHL added.
JS Global analyst Mubashir Anis Naviwala said that following a 4,500-point surge last week, the stock exchange on Monday witnessed profit-taking across the board.
“Going forward, we expect the uptrend to continue and recommend investors to view any downside as an opportunity to buy stocks in banking, cement and exploration and production (E&P) sectors,” the analyst added.
Overall trading volumes decreased to 1.2 billion shares against Friday’s tally of 1.3 billion. The value of shares traded during the day was Rs33.4 billion.
Shares of 386 companies were traded. Of these, 159 stocks closed higher, 224 dropped and three remained unchanged.
K-Electric was the volume leader with trading in 164.6 million shares, gaining Rs0.06 to close at Rs4.49. It was followed by WorldCall Telecom with 93.3 million shares, gaining Rs0.04 to close at Rs1.71 and Kohinoor Spinning Mills with 65.3 million shares, gaining Rs0.55 to close at Rs4.74.
Foreign investors were net buyers of shares worth Rs1.11 billion, according to the NCCPL.