The capital market on Monday recorded selling pressure with institutions choosing to book their profits in overbought heavy weights amid market adjustment and resistance at 47,000 points level, dealers said.
Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.39 percent or 183.92 points to close at 46,721.87 points level. Volumes decreased 428.626 million shares, from 440.278 million shares traded on Thursday. KSE-30 shares index also dipped 0.39 percent or 76.14 points to end at 19,499.85 points level.
Salman Ahmad, head of institutional sales at Aba Ali Habib, said, “Market has been under pressure since the index breached the 47,000 points level; need some time to pull out from the selling pressure as adjustments failed to keep the pace.”
Moreover, fresh buying surfaced in refinery stocks over rising crude oil price and expectations of good earnings from the sector. IT companies were also in the buying chart because during the last week the sector registered some correction.
Fundamentals were strong as large scale manufacturing progressed well and the economy was on the horizon of revival, Ahmad added.
Muhammad Saeed Khalid, head of research at Shajar Capital, said, “The stock market remained sluggish during the session, marking an intra-day low of 247 points to close at 46,722 index levels.”
Investors participated mostly in the automobile and tech stocks mainly on account of expected announcement of sales volume and trade numbers for the seven month period of FY2021.
Furthermore, the investors also accumulated scrips of the power sector, after the disbursement of Rs161 billion by the government of Pakistan in order to resolve the circular debt, Khalid added.
Of 419 active scrips, 158 increased, 242 lost, and 19 remained unchanged. Yawar uz Zaman, head of research at Pearl Securities, said, “KSE-100 absorbed selling pressure (on Monday) as the index recovered from its support level. Technology, refinery, and power sectors remained in the limelight again, as Pakistan has decided to seek investment from China and offered a partnership of $9 billion in PARCO coastal refinery.”
The revised IPPs deal has been officially approved, and the government is ready to pay Rs161 billion to the power sector to ease pressure on companies and to reduce circular debt, he added.
Price of international crude oil touched $60/bbl as coronavirus lock down eased-off. Analyst Ahsan Mehanti from Arif Habib Corporation said, “Stocks closed lower in the earnings season amid thin trade on institutional profit-taking in overbought scrips.”
Early session support was witnessed on surging global crude oil prices, impact of over $400 million receipts in Roshan Digital Accounts, and rupee stability.
Investor concerns over surge in local petroleum prices, rising local power tariff, and concerns on spiking of fiscal deficit to Rs1.13 trillion for July- December 2020 played a catalytic role in the bearish close, Mehanti added.
Bhanero Textile, up Rs61.95 to close at Rs887.96/share, and Sapphire Textile, strengthening by Rs43.59 to finish at Rs1,043.59/share, were the major gainers.
Rafhan Maize, down Rs93.44 to close at Rs10,796.56/share, and Colgate Palmolive, losing Rs86.56 to close at Rs2,893.33/share, were the main losers.
WorldCall Telecom led volumes with 52,912 million shares. The scrip gained Re0.09 to end at Rs1.23/share.
Organic Mea posted the lowest turnover with 11,433 million shares. Its scrip gained Rs2.48 to end at Rs35.59/share.