PSX falls significantly due to institutional profit-taking

KSE-100 index dives 925.35 points, settles at 65,204.68

Karachi: Amidst a global decline in crude prices and worries about the future of structural reforms following the country’s elections, institutional profit-taking in overbought stocks caused the Pakistan Stock Exchange (PSX) to experience significant downward pressure on Monday.

The day began at the intra-day high of 66,586.61 points, followed by a sharp decline in the KSE-100 index for the remainder of the session.

Dismal data on large-scale manufacturing (LSM) growth, which fell 4.1% year-on-year (YoY) in October 2023, and the government’s decision to further raise industrial gas tariffs to address the circular debt crisis were the major drivers behind the market’s downturn.

The bearish trend was mainly fuelled by stocks in the exploration and production (E&P), fertiliser and banking sectors. Consequently, the market fell below the 66,000 mark, touching intra-day low at 65,064.94 points less than an hour before close.

Profit-taking was evident throughout the session with the index fluctuating within a range of 1,521 points. Despite substantial losses, the market managed to conclude the day above the 65,000 level.

“Pressure was witnessed on institutional profit-taking in overbought stocks amid a slump in global crude prices and concerns over the fate of structural reforms post-general elections,” said Arif Habib Corp MD Ahsan Mehanti.

“Dismal data on LSM growth that fell 4.1% YoY in October 2023 and government’s decision on a further increase in industrial gas tariffs to ease the circular debt crisis played the role of catalysts in bearish close of the market.”

At close, the benchmark KSE-100 index recorded a dip of 925.35 points, or 1.4%, and settled at 65,204.68.

According to Topline Securities’ report, profit-taking was visible during Monday’s session. “The index fluctuated within a range of 1,521 points throughout the day, reaching an intraday high of 66,586 and low of 65,064 points,” the statement read.

The E&P, fertilizer, and bank sectors had negative contributions, with Pakistan Petroleum, Meezan Bank, Engro Corporation, Oil and Gas Development Company, and Fauji Fertilizer all losing 281 points overall.

Positively, Topline added, stocks like Pakistan Telecommunication Company, Pakistan Services, and K-Electric contributed gains of 80 points.

“KSE-100 remained below resistance at 66,600, hitting intra-day high at 66,586 before declining sharply for the rest of the session,” stated Arif Habib Limited (AHL).

It stated that Pakistan Petroleum (-2.53%), Meezan Bank (-2.69%), and Engro Corporation (-2.12) made up the largest negative contribution. Major positive contributors included K-Electric (+11.26%), Pakistan Telecommunication Co. (+7.5%), and Pakistan Services (+1.89%).

According to Mubashir Anis Naviwala, an analyst at JS Global, there was a lot of profit-taking on Monday in the KSE-100 index.

“Going forward, we expect profit-taking to continue and recommend investors to view any downside as an opportunity to buy stocks in banking, cement and E&P sectors,” the analyst added.

Overall trading volumes increased to 1.89 billion shares against Friday’s tally of 1.74 billion. The value of shares traded during the day was Rs24.6 billion.

Read More: PSX falls significantly due to institutional profit-taking

Shares of 381 companies were traded. Of these, 107 stocks closed higher, 264 dropped and 10 remained unchanged.

WorldCall Telecom was the volume leader with trading in 444.1 million shares, gaining Rs0.08 to close at Rs1.90. It was followed by K-Electric with 392.7 million shares, gaining Rs0.59 to close at Rs5.83 and Cnergyico PK with 205.4 million shares, gaining Rs0.15 to close at Rs5.90.