Stocks retreat in red over institutional profit-taking

Stocks on Thursday fell into a bear-hug as Panama case verdict euphoria fizzled out faster than expected, while across-the-board institutional profit-taking did the real damage, dealers said. 

Ahsan Mehanti at Arif Habib Limited said the equities closed lower amid pressure owing to institutional profit-taking after major earnings announcements at Pakistan Stock Exchange (PSX). 

“Weak global crude prices, political uncertainty, investor concerns over surging current account deficit, and foreign outflows played a catalytic role in the bearish close of the futures rollover week,” Mehanti said. 

The Pakistan Stock Exchange benchmark KSE-100 shares index shed 0.69 percent or 345.81 points to close at 49,481.70 points. KSE-30 shares index lost 0.84 percent or 220.97 points to end at 26,120.36 points. Out of 403 active scrips, 174 advanced, 208 declined, and 21 remained unchanged. 

The ready market volumes stood at 398.976 million shares as compared to 323.016 million shares a day earlier. Ali Raza at Elixir Securities said equities resumed decline to near four-day low as wider market witnessed across-the-board profit-taking.

“The market struggled to find a clear direction until mid-day and benchmark KSE-100 Index traded in a narrow range, followed by a sell-off, reportedly from local institutional investors, that led to a steady decline, with the index testing support near 49,500 level,” Raza said.

Almost all key sectors closed lower; however, major decline in percentage terms was witnessed in pharmaceuticals, down 1.49 percent, consumer staples, down 1.35 percent, and energy, down 1.09 percent.

Pakistan Petroleum (PPL), down 1.8 percent, witnessed profit-taking after its earnings came in line with the estimates, while its material information regarding its hydrocarbon discovery failed to have any positive impact.

On the other hand, Hub Power (HUBCO), down 0.4 percent, recovered from day's low to close little changed despite announcing below expected earnings. Going forward, analysts expect the market to recover in the days ahead as savvy investors are likely to jump in to take advantage of current weakness and cherry-pick the value-plays including stocks that are slated to be included in MSCI EM Index.

Companies reflecting highest gains include Sanofi Aventis, up by Rs112.32, to end at Rs2358.79/share and Pakistan Tobacco, up Rs74.57, to end at Rs1591/share. Companies reflecting highest losses include Nestle Pakistan, down Rs385.99, to Rs9014.01/share and Wyeth Pakistan, down Rs114.54, to end at Rs2355.66/share.

Highest volumes were witnessed in Engro Polymer with a turnover of 36.64 million shares. The scrip gained 81 paisas to close at Rs29/share. Aisha Steel Mill stood second with a turnover of 27.945 million shares. It gained 88 paisas to end at Rs26.08/share. Azgard Nine was third with a turnover of 26.97 million shares. It gained 18 paisas to finish at Rs14.29/share.