Stocks retreat from record high as caution creeps in ahead of budget, IMF talks

Stocks fell on Monday as investors booked profits after the market touched a record high the previous week, dealers said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index fell 258.34 points or 0.34 percent to close at 75,084.00 points. The KSE-30 index decreased by 120.62 points or 0.50 percent to 24,093.67 points.

“Stocks closed under pressure amid over-leveraging and future contracts rollover at the PSX,” said analyst Ahsan Mehanti at Arif Habib Corp.Mehanti said the pre-budget uncertainty and concerns over structural reforms for Pakistan-IMF new bailout package with reports of new tax collection target at Rs12.4 trillion played a catalytic role in the bearish close.

Traded shares increased by 121 million shares to 375.359 million shares from 496.699 million shares. The trading value dropped to Rs16.301 billion from Rs17.631 billion. Market capital, however, expanded to Rs10.140 trillion against Rs10.133 trillion. Of 380 companies active in the session, 137 closed in green, 223 in red and 20 remained unchanged.

Naveed Nadeem, an analyst at Topline Securities, said equity market experienced a consolidation day. The benchmark index reached an intraday high of 75,618 points (+276 points) and an intraday low of 74,734 points (-608 points).

"At these levels, profit-taking was observed, and ultimately index settled at 75,084 points (down 0.34 percent)."

The fertilizer, banking, and IT sectors made positive contributions, with SYS, MEBL, TRG, and FFBL collectively adding 122 points. Conversely, ENGRO, MCB, and HBL collectively lost 143 points.

The highest increase was recorded in Ismail Industries Limited shares, which rose by Rs69.93 to Rs1,618.85 per share, followed by Hallmark Company Limited, which increased by Rs41.33 to Rs593.44 per share. A significant decline was noted in Hoechst Pakistan Limited, which fell by Rs97.78 to Rs1,429.19 per share, followed by Khyber Textile Mills Limited, which closed lower by Rs34.55 to Rs426.18 per share.

Brokerage Arif Habib Ltd said despite a weak start to the week, the benchmark index managed to maintain the crucial 75,000 level.

PIAA (-7.5 percent) is set to be delisted on May 25 as part of the government’s plan to privatize the national carrier. Under the swap ratio, PIA Holding Company shareholders will receive one Class A and one Class B share of Pakistan International Airlines Corp. The bourse will notify the listing of PIA Holding Company shares separately.

Additionally, the State Bank of Pakistan has approved the due diligence of SBL (+9.62 percent) by BAFL (-1.43 percent)."For the remainder of the week, maintaining the 74,000 level will keep the outlook positive with 76,000 in sight," the brokerage said.

Hum Network remained the volume leader with 30.918 million shares which closed higher by 93 paisas to Rs10.97 per share. K-Electric Ltd. followed it with 18.317 million shares, which closed higher by 10 paisas to Rs4.67 per share.

Other significant turnover stocks included Dewan Motors, WorldCall Telecom, Kohinoor Spining, Dewan Cement, Fauji Fert Bin, The Searle Company, Pak Elektron and Netsol Tech. In Future Market, 318 companies recorded trading, of which 103 increased, 210 decreased and 5 remained unchanged.