PSX ends down as investors book profits in technology stocks

Capital market on Friday closed the week in the red zone, as investors weighing the dismal economic outlook chose to book profits and institutional buyers focused on value stocks, traders said.

Pakistan Stock Exchange (PSX) benchmark KSE 100-share index declined 0.34 percent or 148.52 points to close at 44,118.39 points against 44,266.91 points recorded in the last session. The intraday high of the index was 44,468.89 points, while the lowest level of the day was recorded at 44,041.62 points.

Analyst Ahsan Mehanti at Arif Habib Corp said, “Stocks closed lower on investor concerns on the dismal economic outlook.”

Political noise, reports of surging external debt repayable, $7.1 billion current account deficit for July-November ‘21, and rupee instability ahead of the International Monetary Fund (IMF) board review on January 12 played a catalytic role in the bearish close, he said.

KSE-30 index also decreased 0.42 percent or 73.37 points to end at 17,353.47 points against 17,426.84 points in the last session.

Traded shares dropped by 17 million to 223.37 million shares from 240.42 million shares during the previous session. Trading value decreased to Rs7.33 billion from Rs8.02 billion. Market capital narrowed to Rs7.559 trillion from Rs7.582 trillion. Out of 353 companies active in the session, 136 posted gains, 194 losses, while 23 remained unchanged.

Muhammad Mubashir, an analyst at JS Research, said another lacklustre session was witnessed. “The market opened on a positive note and gained 200 points, but eventually, due to lack of positive triggers, investors chose to book profit, leading the KSE-100 to close at 44,118, down 149 points,” he said. “Going forward, we recommend investors adopt buy on dip strategy in banking, E&P and cement sectors.”

The highest increase was recorded in the shares of Nestle Pakistan, which rose by Rs85 to close at Rs5,670/share, followed by Sanofi-Aventis that increased by Rs52.94 to end at Rs758.82/share.

A major decline was noted in shares of Colgate Palmolive, which fell by Rs186.01 to close Rs2,313.99/share, followed by Sapphire Textiles, that shed Rs65.50 to close at Rs820/share.

A report of Arif Habib Ltd said the battle between bulls and bears was conquered by the bears in the last trading hour.

“The market opened with positive momentum as SBP conducted another OMO for 63 days. The optimistic approach faded away due to concerns of investors towards higher inflation and dip in total liquid foreign exchange reserves held by the SBP mainly due to external debt repayment,” said the report.

Activity continued to remain side-ways as the market witnessed hefty volumes in tier-3 stocks. On the flip-side, in the second session institutional buyers started fetching value stocks due to attractive multiples.

Sectors contributing to the performance include technology and communication (-60 points), chemical (-36 points), cement (-25 points) oil and gas exploration companies (-17 points) and textile (-9 points).

Unity Foods Ltd remained the volume leader with 33.50 million shares with an increase of 64 paisas to close at Rs1.17/share. It was followed by Hum Network with 24.16 million shares that closed down by 22 paisas to end at Rs6.66/share.

Stocks that recorded significant turnover included TRG Pak Ltd, TPL Properties, Unity Foods Ltd, Telecard Limited, Treet Corp, WorldCall Telecom, Ghani Glo Hol, and K-Electric Ltd.

Shares’ turnover in the future contracts increased to 85.90 million shares from 77.61 million shares.