Market ends flat on profit-taking in overbought blue chips

Trend at the capital market was almost flat on Thursday owing to long weekend and settlement issues, with equities facing selling pressure from investors booking their profits and resistance beyond 47,000 points level, dealers said.

Benchmark KSE-100 shares index touched the high mark of 47,339 points and low of 46,746 points, before closing recovered from the low, but its session high saw profit-taking in blue chips and investment stocks.

Pakistan Stock Exchange (PSX) KSE-100 index lost 0.06 percent or 27.84 points to close at 46,905.79 points level.

Volumes decreased 440.278 million shares, from 616.309 million shares on Wednesday. KSE-30 shares index rose 0.04 percent or 7.23 points to end at 19,575.99 points level.

Muhammad Saeed Khalid, head of research at Shajar Capital, said, “The market remained sluggish during the session mainly on the ruckus between opposition and government about the senate polls bill.”

Investors booked capital gains ahead of the MSCI review scheduled earlier next week, while also accumulating tech and textile stocks mainly on expected delay of Economic Coordination Committee (ECC) meeting on the textile policy, Khalid added.

Bickering between politicians has been taken on toll on market nerves.

Salman Ahmad, head of institutional sales at Aba Ali Habib, said, “Market has been in the overbought zone and facing resistance after breaching the psychological barrier of 47,000 level.”

Selling surfaced in almost all the sectors such as pharmaceuticals, cement, auto, banks and steel, as price in the recent rally surged sharply, forcing individuals, institutions and other entities to book available profits.

Moreover, fundamentally the sentiment has been strong as exports, remittance and large scale manufacturing have been showing positive signs and recovery in the post-Covid19 period, revealing that the economy was getting back on track, Ahmad added.

Of 430 active scrips, 161 increased, 248 lost, and 21 remained unchanged.

A leading analyst said Mari Petroleum during the session recorded a sharp rise of Rs113/share following the ECC decision. In a meeting on Wednesday, the ECC allowed removal of dividend distribution cap on

Mari Petroleum, which kept the scrip in the limelight, the analyst added.

Analyst Ahsan Mehanti from Arif Habib Corporation said, “Stocks closed lower in the earnings season rally on weak global stocks and institutional profit-taking in overbought scrips.”

Early session support was witnessed on surging global crude oil prices, impact of $400 million receipts in Roshan Digital Accounts and rupee stability. Investor concerns over surge in local petroleum prices and surge in fiscal deficit up to Rs1.13 trillion for July-December 2020 played a catalytic role in the bearish close, Mehanti added.

Rafhan Maize, up Rs705 to close at Rs10,890/share, and Mari Petroleum, strengthening by Rs115.04 to finish at Rs1,649.02/share, were the major gainers.

Unilever Foods, down Rs499.99 to close at Rs14,000.01/share, and Pakistan Tobacco, losing Rs48 to close at Rs1,550/share, were the main losers.

Pakistan Refinery led volumes with 34,493 million shares. The scrip gained Re0.27 to end at Rs28.19/share.

Silk Bank Limited posted the lowest turnover with 9.234 million shares, its scrip lost Re0.01 to end at Rs1.57/share.