Stocks fall after 11-day rally as investors cash out at 50,000 level

Stock snapped an 11-day winning streak on Tuesday, closing down 0.4 percent as investors booked profits after the benchmark crossed the 50,000 mark for the first time in six years.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index fell 200.34 points to close at 49,531.01 points. The highest index of the day remained at 50,017.45 points while the lowest level was recorded at 49,508.42 points.

“The market witnessed profit-taking after crossing the psychological barrier of 50,000 points,” said Ali Najib, an analyst at Topline Securities.

He said that the rupee’s depreciation against the dollar and geo-political tensions also weighed on the sentiment. The rupee closed at 277.03 per dollar, down 0.07 percent from Monday’s close of 276.83, ending a 28-session rally that had seen it appreciate by more than 10 percent since early September.

"The day commenced on a positive note as investors continued their cherry-picking at the PSX around the 50,000-point level. However, as expected, once the benchmark index hit the 50,000 mark, profit-taking kicked off and compelled the index to close the day on a negative note after posting consecutive positive 11 sessions."

The KSE-30 index also fell by 167.72 points or 0.98 percent to close at 16,958.11 points. Traded shares dropped by 99 million shares to 368.340 million shares from 467.383 million shares. The trading value decreased to Rs10.404 billion from Rs14.119 billion. Market capital dropped to Rs7.269 trillion against Rs7.317 trillion. Out of 347 companies active in the session, 149 closed in green, 186 in red and 12 remained unchanged.

During the day, the power, tech, bank and E&P sectors contributed negatively to the index where HUBC, TRG, UBL, PPL and HBL lost 146 points, cumulatively. On the flip side, LUCK, MEBL and PIOC witnessed some buying interest as they added 44 points collectively.

Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed lower amid late session pressure on the weak rupee and geo-political tensions.

He said that unresolved circular debt crises, gas circular debt amassing over Rs2.8trn, and concerns for a likely massive surge in industrial gas tariff played a catalytic role in the bearish close.

The highest increase was recorded in Rafhan Maize, which rose by Rs190 to Rs8,390 per share, followed by Philip Morris Pak., which increased by Rs28.50 to Rs609 per share. A significant decline was noted in Bhanero Tex., which fell by Rs37.50 to Rs957.50 per share, followed by Pak Hotels, which decreased by Rs36.35 to Rs448.36 per share.

Brokerage Arif Habib Ltd said the index saw an intraday correction of over one percent after touching the milestone of 50,000 points and closed in negative territory for the first time this month.

The brokerage said that if the market declines below 49,000 points, it might suggest a correction towards 48,500 points. "On the upside, the next significant resistance level is at 53,000 points, representing the all-time highs from 2017."

It advised investors to consider taking some profits at these psychologically important levels, as they can be pivotal points for market movements. Investors are encouraged to consider taking some profits at these psychologically important levels, as they can be pivotal points for market movements.

K-Electric Ltd. remained the volume leader with 65.958 million shares which closed lower by 4 paisas to Rs3.11 per share. It was followed by Pak Int. Bulk with 21.502 million shares, which closed higher by 2 paisas to Rs4.61 per share.

Other significant turnover stocks included Maple Leaf, Ghani Glo Hol, Air Link Commun, WorldCall Telecom, Fauji Cement, D.G.K. Cement, Unify Foods Ltd, and Hascol Petrol. Shares’ turnover in the future contracts decreased to 65.860 million shares from 98.555 million shares.