Stocks flat in trigger-drought led profit-taking

Stocks were barely changed on Tuesday, trading in a thin band, as lack of triggers suppressed investor’s risk appetite, giving rise to profit-selling after every rally especially by the institutions and foreign fund houses, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index gained 0.15 percent or 61.51 points to close at 40,184.01 points, while KSE-30 followed suit with a high of 0.09 percent or 16.44 points to end at 17,401.87 points level.

The KSE-100 index showed erratic movement with index touching a session high of 40,344 points and low of 40,113 points. A closing above 40,000 points indicated resistance around 40,400 points but getting support may help the index sustain above 40000 mark, analysts said.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks showed recovery led by oil, banking and cement scrips amid speculation in the earnings season”.

Surging textile and cement exports, speculations on likely positive outcome of $6.8 billion ML-1 CPEC project, and robust data on remittances in July 2020 buoyed the market, Mehanti added.

Of 400 active scrips, 184 were up, 196 fell, while 20 ended without any change. Volumes came down to 458.803 million shares, compared to 522.652 million shares in the previous session.

Tahir Abbas, director research at Arif Habib Ltd, said, “The cement, steel and other manufacturing sector companies were under the spotlight with the government’s vision to disburse enough funds for the public-related development projects to help boost demand”.

The agreement between the government and independent power producers to help curtail circular debt and also reduce electricity tariff, trimming cost of doing business, bodes well for the industries, Abbas added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said "Owing to overbought state, the market has been witnessing a volley of profit-taking, but fundamentals are strong because of unprecedented rise in overseas workers’ remittance and Fitch’s maintaining long-term rating for Pakistan and growth in exports”.

Frequent support from individuals, institutions, including insurance, mutual funds, and foreign fund houses, helped the index maintain an above 40,000 points’ level, Ahmad added.

Arif Rehman, head of research at Fortune Securities said, “The market closed slightly positive, though it was a mixed bag with cements once again leading and making new highs”.

The IPPs were once again in the limelight on account of agreement with the government on future capacity payments and expected resolution to long outstanding receivables, while volumes were once again on the higher side in power sector, Rehman added.

The top gainers were Sapphire Textile, up Rs25 to close at Rs850/share, and Gatron Industries, up Rs15 to finish at Rs630/share, while Rafhan Maize, down Rs175 to close at Rs8,000/share, and Unilever Foods, losing Rs100 to close at Rs9,700/share, were the main losers.

Pakistan International Bulk was the highest-volume-maker with 35.581 million shares, gaining Rs0.45 to end at Rs12.51/share, whereas Bank of Punjab the lowest with 14.009 million shares, and gained Rs0.16 to end at Rs10.16/share.