Stocks on Thursday slipped in an overbought market as bet-hedging investors chose not to take any chances after a Moody’s report raised concerns over economy, dealers said.
Benchmark KSE-100 shares index lost 0.22 percent or 102.61 points to close at 45,989.35 points at Pakistan Stock Exchange (PSX). Volumes decreased to 620.746 million shares, from 845.282 million Wednesday. KSE-30 dipped 0.56 percent or 108.47 points to end at 19,177.68 points level.
Muhammad Saeed Khalid, research head at brokerage Shajar Capital, said the stock market remained sluggish mainly because of Moody’s dim economic recovery outlook along with the expected decline in banking profitability.
Banking and oil sectors came under selling pressure owing to the fundamentals along with the correction in international oil prices, he said.
“We witnessed accumulation in textile and power sectors due to hike in Fuel Adjustment prices by NEPRA along with a likely ECC meeting later this week,” Khalid added.
Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said correction was due as the market was deep in the overbought zone; however, closing above 46,000 points was indicative of strong valuations.
Economic numbers were positive as exports and remittances were on the rise amid hopes current account might post another surplus for the sixth consecutive month, he added.
“The market needs some positivity from the economic front to appreciate more. On the other hand the index might see some more slides and adjustments on Friday, the last day of the week,” Ahmad added.
As many as 437 scrips were active on Thursday, of which 183 went up, 239 down, and 15 remained unchanged.
Zaid Aftab, research analyst at Pearl Securities, said the market registered another profit-taking session amid Moody’s report that economic activity would remain below pre-outbreak levels and GDP was likely to mark 1.5 percent growth in this fiscal year.
However, the economy might face inflationary pressure in coming months as POL prices were likely to increase tomorrow under bi-monthly prices adjustments due to persistent rise in crude oil prices, he said.
“Going forward, we expect the market to move both ways and we suggest investors adopt the ‘sell on strength’ strategy in the coming days,” Aftab added.
Ahsan Mehanti at Arif Habib Limited said bearish activity was witnessed amid profit-taking in overbought stocks at PSX on concerns over economic slowdown after Moody’s report said Pakistan’s economic growth was expected to hover around 1.5 percent in FY2021.
Early session support came from oil and cement stocks that remained in the limelight owing to strong sales numbers in July-December 2020, he said.
Concerns over surging power tariff, gas shortfall for industries and slump in global crude oil prices invited bears, Mehanti added.
Colgate Palmolive, securing Rs98.98 to close at Rs3198.98/share, and Pakistan Tobacco, strengthening by Rs42.98 to finish at Rs1650/share, emerged as the top gainers of the day.
Worst losses were suffered by Nestle Pakistan, which lost Rs104.37 to close at Rs6,630.63/share, and Rafhan Maize as it shed Rs68 to close at Rs9,782/share.
Hum Network’s trade volume was the highest as its 57.531 million shares changed hands, while Fauji Foods Limited’s was the lowest with 17.735 million traded shares.
Source: The News