Stocks end lower on profit-taking,rate uncertainty looms

Stocks ended lower on Friday as investors took profits amidst lingering uncertainty over the central bank’s upcoming policy rate decision, dealers said.

The Monetary Policy Committee (MPC) is set to convene on Monday, March 18, to deliberate on the key interest rate, which stands at an unprecedented 22 percent. Market participants are keenly awaiting the outcome, which could significantly impact investor sentiment, dealers added.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index shed 247.80 points or 0.38 percent to close at 64,816.47 points. The highest index of the day remained at 65,353.66 points while the lowest level was recorded at 64,759.61 points. The KSE-30 index fell 155.40 points or 0.72 percent to 21,556.86 points.

“Profit-taking was witnessed at the PSX amid pressure in overbought scrips on investor concerns about economic uncertainty,” said analyst Ahsan Mehanti at Arif Habib Ltd. "Challenges with external financing, uncertainty over the outcome of Pakistan-IMF review talks, and status quo expectations in the monetary policy announcement amid SPI inflation surging 32.89 percent year-on-year played a catalytic role in the bearish close."

Traded shares decreased by 56 million shares to 259.373 million shares from 315.247 million shares. The trading value dropped to Rs10.120 billion from Rs10.487 billion. Market capitalisation narrowed to Rs9.202 trillion against Rs9.246 trillion. Of the 322 companies active in the session, 113 closed in green, 192 in red, and 17 remained unchanged.

Several sectors, including exploration & production (E&P), automotive, banking, and technology, contributed negatively to the index performance, with companies such as MARI, PPL, MTL, PSO, TRG, and HBL collectively shedding 266 points.

Analyst Nabeel Haroon at Topline Securities said a range-bound session was observed, as the index traded between its intraday high of 289 points and intraday low of 248 points to finally close at the 64,816 level.

“The volatility in the market can be attributed to news that the IMF team has expressed displeasure over the Ministry of Finance verdict that it had materialized all structural benchmarks before the completion of the review by the Fund staff and the monetary policy on Monday where investors preferred to remain on the sidelines,” Haroon said.

Major positive contributions to the index came from EFERT, MEBL, LUCK, NBP, MARI, and SYS, as they cumulatively contributed 135 points to the index. On the other hand, OGDC, HUBC, PPL, BAHL, UBL, and PSO lost value to weigh down on the index by -179 points.

The highest increase was recorded in shares of Unilever Pakistan Foods Limited, which rose by Rs100 to Rs21,500 per share, followed by Indus Motor Company Limited, which increased by Rs21.86 to Rs1,556.48 per share. A significant decline was noted in shares of Premium Textile Mills Limited, which fell by Rs24.50 to Rs325.50 per share, followed by Mehmood Textile Mills Limited, which closed lower by Rs16.67 to Rs390.33 per share.

Brokerage Arif Habib Ltd said the benchmark experienced a decline of 1.5 percent week-on-week, primarily attributed to persistent supply levels preventing the index from surpassing the 66,000 points mark. "Currently, the primary liquidity draw remains at an all-time high of 67,000 points, with weekly support identified at 63,000 points."

"Looking ahead to the coming week, the pivotal level of 64,000 must be maintained for further progress towards 66,000 points. However, trading below 64,000 points could lead to additional consolidation in the market."

Hascol Petrol remained the volume leader with 56.955 million shares, which closed higher by 18 paisas to Rs8.56 per share. Cnergyico PK followed it with 19.638 million shares, which closed lower by 15 paisas to Rs4.94 per share.

Other significant turnover stocks included WorldCall Telecom, Telecard Limited, B.O. Punjab, National Bank XD, The Organic Meat, Oil & Gas Dev. XD, Air Link Commun, and Pak Refinery. In Future Market, 328 companies recorded trading, of which 82 increased, 239 decreased and 7 remained unchanged.