Stocks close flat as profit-taking wipes early gains

Stocks closed flat on Friday after rollercoaster morning as the announcement of tax amnesty scheme ignited a buying spree in initial hours, however profit-taking weighed in afterwards and the day’s gains were wiped off, dealers said.

“Announcement of amnesty scheme proved to be a dampener at the bourse, similar to the MSCI upgrade that raised the hopes of index achieving even higher targets, but the reaction from investors was truly reflective of what happened on Friday,” an analyst at Arif Habib Limited said in a note.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.16 percent or 76.80 points to close at 46,637.62 points. KSE-30 shares index gained 0.10 percent or 22.49 points to close at 23,460.32 points. As many as 370 scrips were active of which 180 advanced, 164 declined and 26 remained unchanged. The ready market volumes stood at 248.146 million shares as compared with the turnover of 233.35 million shares a day earlier.

Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed higher led by selected auto, financial and cement scrips on strong valuations.

“The tax amnesty over declaration of undeclared assets, upbeat cement and fertiliser sales amid rising local cement and auto prices, and foreign inflows played a catalytic role in the higher close,” he added.

Dealers said profit taking ruled both the sessions which took turns from cement to bank and virtually spared no sector.

The market opened on a positive note up 200 points and within a few minutes, the gains crossed 550 points, however, selling pressure caused the index to fall and at one point, in the second session, it even turned negative. Investors were perturbed by the negative take from opposition parties and the possibility of the amnesty scheme being challenged by the parliament.

“Potential US dollar inflow from scheme is expected to ease pressure on the foreign exchange reserves. News of International Islamic Trade Finance Corp (IITFC) agreeing to lend $3.285 billion to finance trade activities for a period of three years is also expected to support the country's foreign exchange reserves ahead,” analyst Maaz Mulla at JS Global said.

Moving forward, analysts expect overall activity to remain buoyant in the coming sessions with flows from foreigners and local institutions guiding the market.

Companies with the highest gains included Colgate Palmolive, up Rs155 to close at Rs3,255/share, and Philip Morris Pakistan, up Rs142.5 to close at Rs2,992.5/share.

Companies with the most losses included Abbot Laboratories, down Rs12.10 to close at Rs711.90/share, and Siemens Pakistan, down Rs12 to end at Rs898/share.

Highest volumes were witnessed in Engro Polymer with a turnover of 16.29 million shares. The scrip gained 76 paisas to close at Rs37.70/share. Sui Northern Gas was second with a turnover of 12.94 million shares. It gained Rs3.35 to close at Rs117.66/share.

TRG Pakistan was third with a turnover of 10.73 million shares. It gained 57 paisas to close at Rs36.23/share.