Stocks flatline on institutional profit-taking forays

Stocks on Thursday fought up from a deep day-low to end flat mostly, owing to institutional profit-taking as fundamentals continue to remain strong amid renewed concerns over economic growth seen stunted in this fiscal too, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index was down 0.04 percent or 17.25 points to close at 40,514.17 points, while KSE-30 inched 0.12 percent or 21.24 points lower to end at 18,408.29 points.

Of 366 active scrips, 125 advanced, 225 retreated, and 16 were unchanged. Investor participation shrank down to 227.022 million shares, compared to 305.027 million shares in the previous session.

Ahsan Mehanti from Arif Habib Corporation said stocks closed lower on institutional profit-taking, amid concerns over ongoing political noise, weak earnings outlook, and higher CPI (Consumer Price Index) based inflation. “Mid-session support was witnessed in oil and banking scrips on higher global crude oil prices and surging banking spreads.”

Furthermore the dismal auto sales data for November 2019, foreign outflows, and renewed concerns over economic growth led to bearish close, Mehanti added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said the market was being driven by the profit-hunters as the bourse was currently caught up in an overbought cycle.

“However, the index has not recorded any big fall as buyers are still active, hinting the market is fundamentally strong.” Ahmad said decline in cut-off yields of PIBs (Pakistan Investment Bonds), though a symbolic one, is still making equities look a bit attractive.

“Moreover the ADB (Asian Development Bank) forecast that economy is expected to be sluggish, growing at the same pace as that of the preceding year worried investors,” Salman added. Topline Securities in a note said decline in PIB yields kept the sentiment strong.

“It was owing to inherent strength and investor confidence that the benchark index recovered from an intraday low of 40,172 points to close flat at the end of the day,” the brokerage said. A leading trader said for the couple of session the market had been under the spell of adjustments as the key target for the market men was 41,000 points-mark. “However, despite a volley of selling the index is resisting falling below 40,000 points-mark, which has been good omen.” But its slipping under that level would be taken as a troubleshooter for the market,” he said.

Arif Habib Limited, in their market analysis, said the market traded no different than how it has been since the beginning of the week.

“Selling pressure remained there, which was primarily been due to profit-taking by investors.” Yesterday’s decline in PIBs yields failed to prop up the index, while none of the listed sectors remained unscathed, cement sector was the most affected by this selling pressure, the brokerage added.

Rafhan Maize, up Rs145 close at Rs7,200/share, and Nestle Pakistan up, Rs130 to finish at Rs8,080/share, were the top gainers of the day. On the other hand, Sapphire Textile, down Rs55.19 to close at Rs1048.81/share, and Phillip Morris Pakistan, down Rs44.95 to close at Rs2450.00/share, remained the top losers of the day. Unity Foods Limited, with 37.752 million traded shares, was the volume leader today, whereas it gained Rs0.24 to end at Rs14.90/share.

Maple Leaf, whose 5.518 million shares changed hands today, posted the lowest volume, losing Rs0.57 to end at Rs24.26/share.