Stocks slip as profit-taking cuts two-day rally short

Stocks on Thursday ended a shade lower after a couple of back-to-back bumper sessions in terms of gains, which created openings for investors, especially institutions, to garner the fresh crop of profits that’s currently ripe for picking, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index lost 0.19 percent or 75.69 points to close at 40,455.44 points, while KSE-30 shares index followed suit with a low of 0.21 percent or 39.58 points to end at 18,653.35 points.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks closed lower led by selected scrips across the board as investor weighed finance minister remarks over economic challenges...”.

“Banking stocks outperformed on strong financials and upbeat home remittances data for July-January FY20 period.”

Weak global stocks and slump in global crude oil prices, concerns over ongoing foreign outflows, and higher inflation played dragged the index down, Mehanti added. Of 340 active scrips, 138 were up, 177 down, and 25 ended unchanged.

Ready market volumes reached 197.436 million shares, compared to 180.327 million in the previous session. Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said “The fundamentals continue to be strong, following a positive nod from the International Monetary Fund as they understand slippage of revenues, but selling from institutions trimmed the share values”.

“The market closed in the minus column because of oil and exploration stocks because crude oil prices have been easing for the last one week.”

Crude oil price even touched $50 per barrel from its high of $64 some two weeks ago, Ahmad added. Mari Petroleum was down by Rs13.57, Pakistan Oilfields Rs3.27, Pakistan Petroleum Limited Rs 1.47, and OGDC lost Rs 0.58.

A leading analyst said selling was witnessed in the cement sector, barring few companies including DG Khan Cement.

“DG Khan Cement closed with a gain of Rs3.01/share on back of above expectation financial results.” DGKC reported consolidated profit of Rs501 million for the second quarter of FY20 compared to a loss of Rs1.447 billion in first quarter of FY20, the analyst added.

A trader said the market showed dismal performance following developments such as increase in cut-off yields in one-year treasury bills by 39 basis points and reports that the government might increase duties on some of the products, on which general sales tax was lower.

“Following the identification of some of the products, the market would move accordingly in the coming sessions.” While few were waiting for the outcome of the upcoming FATF (Financial Action Task Force) meeting in Paris, the same trader said.

The highest gainers were Wyeth Pakistan Limited, up Rs34.60 close at Rs814/share, and Bata Pakistan, up Rs32.72 to finish at Rs1,850/share.

Companies that booked highest losses were Sapphire Fibre, down Rs41.42 to close at Rs810/share, and Otsuka Pakistan, down Rs14.19 to close at Rs383/share.

Unity Foods Limited recorded the highest volumes with 22.382 million shares; however, it lost Rs0.73 to end at Rs13.29/share. Pakistan International Bulk’s turnover was the lowest with 5.926 million shares, but it gained Rs0.15 to end at Rs11.10/share.