Profit-booking pulls stocks down marginally

Pakistan Stock Exchange (PSX) on Thursday closed with marginal losses as dispirited investors continued to book profits at higher valuations.

In the morning, trading commenced on a positive note as the KSE-100 index touched the intra-day high of 70,645.29 points in the initial hours but soon it stumbled over concerns about the poor economic scenario.

The central bank found commercial banks guilty of violating its instructions for foreign currency transactions and imposed penalties of Rs775.54 million on nine banks including the leading ones, which discouraged investor activity.

A slump in global oil prices amid US sanctions on Venezuela and Iran coupled with fading rate cut expectations also kept investors at bay.

The index continued its rapid bearish movement well after midday as investors opted to book profits. Late buying helped the bourse to recover significantly and it closed flat above the 70,000 mark.

‘Stocks closed under pressure amid a slump in global crude oil prices and steady government treasury bond yields, which dashed rate cut hopes,’ said Ahsan Mehanti, MD of Arif Habib Corp.

‘Dismal data of car sales that fell 38% year-on-year in Jul-Mar FY24, widening of fiscal deficit to 7.4%, weaker rupee and SBP’s fines on commercial banks for regulatory violations played the role of catalysts in negative close of the market.’

At close, the benchmark KSE-100 index recorded a slight decline of 43.20 points, or 0.06%, and settled at 70,290.12.

Topline Securities, in its report, remarked that it was ‘a day marked by profit-booking’. The KSE-100 index began positively, reaching a high of 311.98 points. However, investors chose to capitalise on the gains.

Several factors contributed to the downward movement, with companies like Meezan Bank, Lucky Cement, Hub Power, Bank AL Habib, and Habib Bank collectively shedding 262 points.

Conversely, Engro Fertilisers, MCB Bank and Fatima Fertiliser made positive contributions, adding 177 points to the index, it said.

Meezan Bank announced its 1QCY24 results, reporting earnings per share (EPS) of Rs14.18 along with a cash payout of Rs7 per share.

Engro Fertilisers also declared its 1QCY24 results, posting an EPS of Rs8.08 with a cash payout of Rs8 per share, which surpassed street estimates, Topline added.

In its review, Arif Habib Limited (AHL) said the market kept its ‘support at 70,000 to keep upside prospects intact’.

Engro Fertilisers announced 1QCY24 EPS of Rs8.08, up 145% YoY and dividend per share of Rs8, beating expectations, which sent its share price to a new all-time high.

‘Thursday’s low (69,783) sets a trend for price action to trade higher towards the current weekly high of 71,000,’ AHL added.

JS Global analyst Muhammad Shuja Qureshi said late buying rescued the market from the low of 69,783. Auto and refinery sectors posted handsome gains where National Refinery closed near its upper lock.

‘We expect market volatility to continue and advise investors to book gains on the higher side,’ the analyst added.

Overall trading volumes decreased to 440.3 million shares against Wednesday’s tally of 442.1 million. The value of shares traded during the day was Rs24.4 billion.

Shares of 359 companies were traded. Of these, 166 stocks closed higher, 174 dropped and 19 remained unchanged.

Cnergyico PK was the volume leader with trading in 33.2 million shares, losing Rs0.08 to close at Rs4.55. It was followed by K-Electric with 29.9 million shares, gaining Rs0.06 to close at Rs4.43 and Pakistan Refinery with 28.4 million shares, gaining Rs0.85 to close at Rs29.27.

Provided by SyndiGate Media Inc. (Syndigate.info).

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