Bulls retreat once more as 66,000 points proves to be a stubborn quagmire

Stocks closed slightly lower on Monday after hitting a high of over 66,100 points earlier in the session, as investors weighed the prospects of a new government and its economic policies, dealers said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index shed 38.45 points or 0.06 percent to close at 65,755.31 points. The highest index of the day remained at 66,119.34 points while the lowest level was recorded at 65,698.76 points. The KSE-30 index fell by 3.62 points or 0.02 percent to 22,011.94 points.

“Stocks closed under pressure amid weak global equities and concerns for economic uncertainty,” said analyst Ahsan Mehanti at Arif Habib Corp. He said uncertainty over the monetary policy announcement on March 18 and concerns over the outcome of government negotiations for new IMF loans played a catalyst role in the negative close.

Traded shares increased by 67 million shares to 548.764 million shares from 481.704 million shares. The trading value dropped to Rs16.605 billion from Rs16.992 billion. Market capital expanded to Rs9.360 trillion against Rs9.354 trillion. Of 357 companies active in the session, 220 closed in green, 118 in red and 19 remained unchanged.

Analyst Ali Najib at Topline Securities said equities commenced the week positively as the benchmark index made an intraday high of 66,119 points level n earlier trading hours. He said the buying momentum was driven by the cabinet formation as the newly elected government’s cabinet members took the oath. Prime Minister Shehbaz Sharif also called the first meeting of the cabinet in the evening on Monday.

"However, the 66,000 points level has so far proved a quagmire area where bullish forces faced tough competition and eventually surrendered for the fifth time since last week." Power, fertilizer, tech, auto and pharma sectors contributed positively to the index as HUBC, FFC, PTC, MTL and SEARL added 95 points, cumulatively. On the flip side, DAWH, PSEL and NESTLE saw some selling as they lost 160 points, collectively.

The highest increase was recorded in Rafhan Maize Products Company Limited shares, which rose by Rs344.50 to Rs8,999.50 per share, followed by Pakistan Hotels Developers Limited, which increased by Rs36 to Rs516 per share. A significant decline was noted in Unilever Pakistan Foods Limited, which fell by Rs700 to Rs21,200 per share, followed by Nestle Pakistan Limited, which closed lower by Rs472.23 to Rs7,577.77 per share.

Brokerage Arif Habib Ltd stated that the tech names, including AIRLINK (+7.5 percent) and PTC (+8.11 percent), saw significant gains, reaching limit-up levels, indicative of the sector's strength.

In a significant development, HBL Pakistan CEO Muhammad Aurangzeb resigned from his post to join Sharif’s cabinet as a minister, positioning himself as a frontrunner for the finance minister role. Looking ahead, market sentiment remains optimistic, with anticipation of a strong move through 66,000 and towards the previous peak of 67,000 in the near term, the brokerage said.

Cnergyico PK remained the volume leader with 96.542 million shares which closed higher by 22 paisas to Rs5.11 per share. Hascol Petrol followed it with 52.271 million shares, which closed higher by 66 paisas to Rs8.50 per share.

Other significant turnover stocks included Kohinoor Spining, PTCL, Telecard Limited, K-Electric Ltd., Fauji Foods Ltd, WorldCall Telecom, Pak Refinery and The Searle Company. In Future’s Market, 313 companies recorded trading, of which 189 increased, 121 decreased and 3 remained unchanged.