Index ends flat as investors’ book profits on energy gains

The stock market on Tuesday ended flat following a choppy session, as institutions sold their holdings to book profits and seasoned investors anxiously waited for cabinet approval on construction sector and government nod on energy bonds, dealers said.

Topline Securities in a note said the benchmark KSE-100 shares index witnessed a choppy session as it touched an intra-day high of 44,830 (up 0.32 percent) and an intra-day low of 44,458 (down 0.51 percent) to eventually close flat at 44,650 (down 0.08 percent).

Kot Addu Power Company Limited (Kapco) remained in the limelight, owing to the partial payment pertaining to the circular debt, with its stock closing at the upper circuit.

Hub Power Company (Hubco) and Pakistan State Oil witnessed profit taking with both stocks closing down 3.83 percent and 1.62 percent, respectively, the report added.

Pakistan Stock Exchange's (PSX) KSE-100 index lost 0.08 percent or 36.03 points to close at 44.650.43 points.

Volumes increased to 582.367 million shares, from 540.830 million shares on Monday. KSE-30 shares index also dipped 0.33 percent or 61.50 points to end at 18,708.70 points level.

Salman Ahmad, head of institutional sales at Aba Ali Habib said, “For the last two sessions, the market has been under consolidation phase.”

Investors have been waiting for an agreement between the government and independent power producers, which would lead to resolution of circular debt through the issuance of bonds amounting to Rs450 billion.

Oil and power sector recorded gains on expectation of bond issuance; however, delay and some correction in crude oil price led to selling pressure in the domestic oil and exploration sector. Overall sentiment has been stable and needs a trigger to help market gain more, Ahmad added.

Of 409 active scrips, 221 increased, 179 lost, and nine remained unchanged.

Muhammad Jawad Vohra from BMA Trading Desk said the market witnessed a surge of 200 points during the day, but profit taking, especially in energy stocks after a handsome run up in the short-term, brought the index down.

The market would likely consolidate further on these levels; however, he suggested “accumulating commercial banks, cements and conglomerates on any dip, given the attractive valuation”.

Analyst Ahsan Mehanti from Arif Habib Corporation said, “Bearish activity was witnessed amid profit taking in overbought stocks at the PSX on uncertainty over economic outlook.”

Early session support remained on 16 percent growth in cement sales, 11 percent surge in Pakistan Oilfields sales for July-December 2020, and surge in global crude oil prices.

Foreign outflows, surging power tariff, gas shortfall concerns faced by industries and investors, and ongoing political uncertainty played a catalytic role in the bearish close, Mehanti added.

Major gainers were Colgate Palmolive, up Rs44 to close at Rs3,024/share, and Gillette Pakistan, up Rs27.30 to finish at Rs417.86/share.

Indus Dyeing, down Rs31.99 to close at Rs500.01/share, and Gatron Industries, losing Rs30.00 to close at Rs590/share, were the main losers.

Hum Network led volumes with 68,807 million shares. The scrip gained Re0.24 to end at Rs6.02/share. Aisha Steel Mill posted the lowest turnover with 11,199 million shares. Its scrip gained Re0.74 to end at Rs23.22/share.