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Tuesday March 19, 2024

Stocks break record run on profit-booking bump

By Our Correspondent
November 21, 2019

After a record run that rolled up near 10,000 points, stocks on Wednesday suffered losses as investors went on a profit-booking binge across-the-board, mostly squaring their positions ahead of the rollover week, dealers said.

Pakistan Stock Exchange’s (PSX) KSE-100 shares index shed 1.37 percent or 526.69 points to close at 38,037.68 points, while its KSE-30 index lost 1.52 percent or 270.60 points to close at 17,561.08 points. As many as 384 scrips were active of which 130 advanced, 235 declined and 19 remained unchanged.

Ahsan Mehanti at Arif Habib Corp said,” Stocks closed bearish on institutional profit-making amid global equity selloff”. “Plunge in global crude oil prices, investor speculation on interest rates status quo in the central bank policy announcement on November 22nd, and concerns over projected subdued economic growth in FY20 weighed on stocks, Mehanti added.

Volumes reached 327.637 million shares compared to 385.321 million a day earlier. Maaz Mulla at JS Global Capital said,” As per expectations, profit-booking was witnessed at the local bourse as the benchmark index largely remained in the red trajectory”.

“The exploration and production sector closed in the red zone as crude oil prices edged lower in international market. Pakistan Oilfields was down 2.3 percent, Oil & Gas Development Company 1.8 percent, and Pakistan Petroleum (PPL) lost 1.4 percent”.

Profit booking was also witnessed in the banking and cement sectors, Mulla said. “Moving forward, we expect the market to remain positive; however, we recommend investors to book profit on strength,” Mulla added.

Companies reflecting highest gains were Unilever Foods, up Rs345 to close at Rs7,245/share, and Island Textile, up Rs70.93 to close at Rs1,490.0/share.

Nestle Pakistan, down Rs110 to close at Rs6,225/share, and Colgate Palmolive, down Rs100 to end at Rs1,940/share, were the top losers of the day.

An analyst at Arif Habib Limited said after managing a bull-run that added 10,000 points from its low, the market finally took a corrective stance with index plunging 587 points and closing the session at that note.

“Selling pressure was evident in cement, exploration and production companies, oil and gas marketing firms, and banking sector stocks.”

Although dust was seemingly settling on political front, investors took cue from T-bill auction that saw yields increasing further and considered it best to book profit prior to announcement of monetary policy on Friday November 22nd, 2019. Street consensus is for status quo, the brokerage said.

Dealers hailed the approval of country's first-ever national tariff policy, aimed at removing anomalies in import duties structure and using it as an instrument to catalyse industrial production and export growth, which would be a positive going forward.

WorldCall Telecom with a turnover of 28.33 million shares emerged as the highest volume maker, while the scrip gained one paisa to close at Rs1.59/share. The Bank of Punjab was the runner-up in terms of volume with 17.097 million shares. The stock however shed 33 paisas to close at Rs10.73/share. With 15.077 million shares, Pak Elektron stood third and gained 42 paisas to finish at Rs5.45/share.