Pakistan stocks lose momentum on profit-taking

Stocks on Friday failed to maintain the bullish trend as investors booked profits in the overbought market, pulling the benchmark index more than half a percent down, dealers said.

Analyst Ahsan Mehanti at Arif Habib Limited said institutional profit- taking was witnessed in the overbought stocks. “Widening current account deficit, rising coal prices and falling global crude prices invited pressure in cement and oil sectors,” Mehanti said. “Political uncertainty, subdued auto sales and foreign outflows played a catalyst role in the bearish close.”

The Pakistan Stock Exchange’s benchmark KSE 100-share Index closed lower 0.61 percent or 254.52 points to 41,291.43 points. The highest index of the day remained at 41,603.06 points, while the lowest level of the day was recorded at 41,259.13 points. KSE 30-share Index also inched down 0.65 percent or 147.69 points to 22,489.47 points.

Turnover fell 32 million shares to 529.53 million shares. Trading value decreased to Rs16.38 billion from Rs18.67 billion and the market capital inched down to Rs8.42 trillion from Rs8.47 trillion. Out of 438 companies, 169 closed up, 258 ended down and 11 remained unchanged.

Analyst Ali Raza at Elixir Securities said equities hit the brakes after sharp gains on Thursday as participants, keeping the political concerns in the mind, cautiously traded ahead of the weekend.

“We expect the market to trade in the range of 300 and 400 points at the current levels,” Raza said. “Politics will be a dampener in the near-term; however, earnings- and payout-related excitement will keep investors' interest in the select stocks alive as quarterly results will come into full swings from the next week.”

Trading activity was largely concentrated in the second- and third-tier stocks that dominated volume chart, while activity in the blue-chip shares was sluggish on limited institutional interest.

United Bank Limited was down 0.95 percent, Pakistan Petroleum Limited (1.19 percent), MCB Bank Limited (0.93 percent), Hub Power Company (0.88 percent), DG Khan Cement (1.53 percent), Engro Corp (0.86 percent) and Lucky Cement (0.74 percent). Cumulatively, they dented the index more than 100 points.

Highest increase was recorded in Nestle Pakistan. It share price rose Rs300 to Rs8,300/share, followed by Sanofi Aventis that was up Rs62 to Rs1,302/share. Major decrease was noted in Rafhan Maize. Its stock value fell Rs150 to Rs7,700/share, followed by Philip Morris Pak that was down Rs65.07 to Rs1,844.60/share.

Significant turnover was recorded in stocks of TRG Pak Ltd, Bank of Punjab, Dost Steel (R), Pace (Pak) Ltd, Japan Power, Pakistan International Airlines (A), Telecard Limited, Hum Network, Sui Northern Gas Pipelines Limited and Aisha Steel Mill.

TRG Pak Ltd remained the volume leader with 58.30 million shares with a drop of three paisas to Rs45.48/share. It was followed by Bank of Punjab with 54.45 million shares with a drop of 14 paisas to Rs18.16/share.  Turnover in the future contracts increased to 99.93 million shares from 78.11 million shares traded in the previous session.