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October 9, 2019

Stocks snap seven-session winning streak on profit-taking

Business

October 9, 2019

Stocks on Tuesday snapped a seven-session winning streak as institutions and some foreign funds creamed off available profits by shedding the shares that got over-fattened feeding on the strong sentiments in the recent optimism-fired rally, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Shares Index lost 0.48 percent or 160.20 points to close at 33,476.62 points, while KSE-30 shed 0.51 percent or 80.02 points to finish at 15,735.70 points.

Of 388 active scrips, 130 were up, 243 down, and 15 ended unchanged. The ready market volumes stood at 243.025 million shares, compared to 392.157 million shares in the previous session.

Faisal Shaji, strategist at Standard Capital, said, “Individuals booked profits, which was very much on the cards after Relative Strength Index of certain scrips entered the overbought zone”.

In medium term market would continue to complete its bullish cycle, Shaji said, adding that part of optimism was mainly due to Prime Minister Imran Khan's successful visit to China and Pakistan's better than expected position at FATF (Financial Action Task Force).

“A greylist verdict would in fact be considered a victory for financial markets,” he explained. Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “There has been nothing wrong with the market. The index shed weight because of profit-taking and technical correction as it gained sharply in the last couple of sessions.

Though the market was down but key scrips belonging to cement, steel, banking, auto and oil sector ended in green zone, indicating soon the adjustment would be over, Ahmad said. A leading analyst said now all eyes were focused on FATF meeting scheduled later this week in Paris. “Though several rumors have been afloat but the Ministry of Finance held that measures taken to curb money laundering and the movement of illegal money are paying and achievement of targets set by the FATF was within reach.

Ahsan Mehanti from Arif Habib Corporations said, “Pressure remained at the PSX on concerns over economic uncertainty and fall in global crude oil prices”. Uncertainty over outcome of FATF meeting, surging public debt at Rs32.2 trillion amid political noise weighed on the overbought scrips, Mehanti added.

The market, in the last seven sessions, has gained around 2,200 points, while in last three sessions following the meeting of businessmen and the army chief the index spiked by 1273 points. Following this sentimental shift the market first resisted 32,500 points and then 33,000 points barrier, giving the market players a strong ground to to get out of their safe zones.

Arif Habib Limited in a report said, “The market has until now seen a gradual ascent with a cumulative increase of 5,200pts amidst a brief consolidation”. Furthermore the overall sentiment appears still positive, though investors seek profit booking and switching positions from one sector to another, the brokerage added.

“Selling activity was observed generally across the board with disregard to sectoral fundamentals; however, cement sector sustained the most,” brokerage house added. The highest gainers were Colgate Palmolive, up Rs86.35 close at Rs1813.36/share, and Bata Pakistan Rs73.50 to finish at Rs1,543.50/share.

Top losers were Nestle Pakistan, down Rs70 to close at Rs5,510/share, and Siemens Pakistan, down Rs32.50 to close at Rs665.50/share. Unity Foods Limited came out with the highest volumes with 21.568 million shares and gained Rs0.28 end at Rs10.48/share. Fauji Cement had lowest turnover with 6.847 million shares, while it lost Rs0.63 to end at Rs14.98/share.

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