PSX pares early gains as profit-taking steals vaccine rally thunder

Stocks on Tuesday aimed for the stars after news of a potent COVID-19 vaccine sent investors on a buying spree in energy and banking sectors, but late profit-taking reversed over half of the early gains, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index hit a high of 0.9 percent or 369.01 points to close at 41,153.05 points, while volumes increased to 355.986 million shares, from 276.797 million on Monday.

Topline Securities in a note said, “Equities opened on a high note

as investors reacted to positive coronavirus vaccine developments”.

The initial rally was fueled by oil and banking stocks; however, profit-taking near the end of the day resulted pared those early gains, the brokerage added.

KSE-30 shares index gained 1.23 percent or 209.91 points to end at 17,308.15 points level.

Muhammad Saeed Khalid, head of research at Shajar Capital, said, “The market performed well, marking an intra-day high of 814 points to close just above the 41,000 points”.

“We have noticed investors participating in the pharmaceutical sector where companies are trying to launch COVID-19 vaccines in the local market as the pandemic has struck back with higher intensity,” Khalid added.

Muhammad Faizan Munshey, Associate Director at KASB Securities, said, “Stocks followed the global markets rally after US drug-maker Pfizer announced large-scale trials of its coronavirus vaccine showed over 90 percent efficacy in preventing infection”.

The benchmark index went up by 1.99 percent in early trade; however, it surrendered some territory after the strong start amid profit-taking, he said.

“We expect the rally to slow down amid continuous rise in coronavirus cases in the country and concerns that even a promising coronavirus vaccine has many hurdles to clear before becoming available for the general public,” Munshey added.

Of 403 active scrips, 204 advanced, 176 retreated, and 23 stayed as they were at the opening.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “The bullish spell was backed by the news flow that coronavirus vaccine has been developed which prevents 90 percent of infections”.

Moreover, consistent appreciation of rupee against dollar

also boosted sentiments, Ahmad added.

“Going forward, upcoming monetary policy and developments rated to COVID-19 will set the trend down the line,” Ahmad said.

Muhammad Jawad Vohara, from BMA Capital Management’s equity desk, said, “Investors continued to be watchful, assessing an impact of COVID-19 on the economy and the equity market, which may hin

der Tuesday’s rally from going ahead”.

“On the flipside, PKR/USD parity has consistently been favouring forward corporate earnings outlook and should be taken as an opportunity in cyclical stocks, pharmaceuticals, and conglomerates upon minor correction,” Vohra added.

Island Textile, up Rs86.18 to close at Rs1,235.30/share, and Sapphire Textile, up Rs73.16 to finish at Rs1053.42/share emerged as the top gainers of the day.

Unilever Foods, down Rs353.48 to close at Rs12,500/share, and Rafhan Maize, losing Rs173.00 to close at Rs8,525/share, were the main losers.

With 30,914 million shares, TRG Pakistan Limited, down Rs3.08 to end at Rs54.39/share was on the top of the volumes chart, whereas Maple Leaf Cement, down Rs0.44 to end at Rs42.20/share, was at the bottom with 8.267 million traded shares.