Stocks drop 424 points amid profit-taking in overbought market

KARACHI: Stocks closed lower by 424 points on Tuesday as investors opted for profit-taking in an overbought market amid worries over the outcome of the IMF’s first review on the Extended Fund Facility (EFF).

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index decreased by 423.76 points or 0.45 per cent to 93,224.56 points against 93,648.33 points recorded in the last session. The highest index of the day remained at 93,871.62 points while the lowest level was recorded at 92,893.11 points.

Analyst Ahsan Mehanti at Arif Habib Corp said that the stock market declined sharply due to concerns over several issues: institutional investors selling off stocks to secure profits amid uncertainty about the outcome of Pakistan’s IMF review, delays in China’s energy debt rollover, and a shortfall in tax collection. These factors created financial uncertainty, leading to the market’s downturn.

He said that falling global crude oil prices and IMF concerns over unbridged $2.5bn gap in external financing played a catalyst role in bearish activity.The KSE-30 index decreased by 132.85 points to 28,884.93 points against 29,017.77 points.

Traded shares decreased by 23 million shares to 792.904 million shares from 815.188 million shares. The trading value dropped to Rs30.788 billion from Rs37.324 billion. Market capital narrowed to Rs12.031 trillion against Rs12.055 trillion. Of the 454 companies active in the session, 151 closed in green, 242 in red and 61 remained unchanged.

Maaz Mulla, an analyst at Topline Securities, said the negative session can be attributed to investors choosing to book profits on prominent stocks that had appreciated in recent sessions.

Major contributors to the decline included PPL (-1.94 per cent), OGDC (-1.49 per cent), Engro (-2.06 per cent), SYS (-1.49 per cent), and HBL (-1.53 per cent), collectively shaving 267 points off the index.

The pharmaceutical sector, however, continued to attract investor interest, with HALEON, ABOT and GLAXO all closing higher than their previous sessions, extending their recent rally. The highest increase was recorded in Ismail Industries Limited, which rose by Rs123.96 to Rs1,639.50 per share, followed by Sapphire Fibres Limited, which increased by Rs46.55 to Rs1,175.63 per share. A significant decline was noted in Service Industries Limited, which fell by Rs45.87 to Rs1,160.19 per share; Philip Morris (Pakistan) Limited followed it, which closed lower by Rs40.58 to Rs789.5 per share.

Brokerage Arif Habib Ltd stated that the KSE-100 Index swung around the 93,000 level before closing with mixed movements among sectors.

In corporate developments, IGIHL rose 1.69 per cent following approval to acquire a 6.04 per cent stake in PKGS, which edged up by 0.01 per cent. Meanwhile, the Fauji Foundation announced it has withdrawn its bid to acquire voting shares in AGHA, which subsequently declined by 7.3 per cent.

The KSE-100 finds near-term support around the 92,000 level.Pak Int Bulk remained the volume leader with 79.861 million shares which closed lower by 26 paisas to Rs8.48 per share. K-Electric Ltd. followed it with 71.76 million shares, which closed higher by 15 paisas to Rs5.15 per share.

Other significant turnover stocks included Pak Refinery, Sui South Gas, Cnergyico PK, Pak Elektron, WorldCall Telecom, BO Punjab, The Searle Company and Secure Logistics Gro.In the futures market, 308 companies recorded trading, of which 84 increased, 219 decreased and 5 remained unchanged.