PSX Retreats by 638 Points as Investors Engage in Profit-Taking

Correction follows a 4% surge in the previous session; banking, energy, and cement sectors face downward pressure.

KARACHI:

The Pakistan Stock Exchange (PSX) experienced a cooldown on Tuesday, following a significant 4% rally in the benchmark KSE-100 index during the previous session. Profit-taking drove the market lower, despite continued buying interest in specific stocks.

The KSE-100 index dropped 638.45 points, or 0.36%, to close at 177,623.88. During intraday trading, the index reached a high of 179,123.01 and a low of 177,434.96.

Ahmed Sheraz of KASB KTrade noted that the market witnessed a mixed session. After the previous day’s substantial rally, investors opted for selective profit-taking, even as buying momentum persisted in certain sectors.

Key decliners included United Bank, Oil & Gas Development Company, Hub Power, and Pakistan Petroleum. Conversely, Adamjee Insurance, Attock Refinery, Engro Holdings, and Interloop provided support. Sector-wise, commercial banks, oil and gas, and cement stocks remained under pressure, while the insurance and refinery sectors outperformed.

Refinery stocks attracted investor interest following reports regarding the approval of an amended refinery policy. Additionally, Pakistan Telecommunication Company reported a significant financial turnaround, with consolidated earnings shifting from a Rs9.8 billion loss to a Rs4.6 billion profit for the six-month period.

Sheraz indicated that market direction will likely depend on policy developments, corporate earnings, sector-specific news, and geopolitical developments in the Middle East.

JS Global analyst Nawaz Ali observed that following the robust bull run in the previous session, investors moved to book profits on Tuesday, resulting in the 638-point decline. The index traded within a narrow range, hitting an intraday peak of 179,123 and a low of 177,435.

The refinery sector remained a focal point due to the policy amendments. Ali suggested that despite the current correction, market valuations remain attractive, recommending a “buy-on-dips” strategy.

According to Arif Habib Limited (AHL), the KSE-100 surrendered some of its recent gains, with 26 shares advancing against 73 decliners. Adamjee Insurance (+10%), Attock Refinery (+2.96%), and Engro Holdings (+0.34%) were the top contributors, while UBL (-0.96%), OGDC (-0.76%), and Hubco (-0.61%) were the primary drags.

AHL highlighted that geopolitical attention has shifted toward discussions between Iran and Oman regarding the resumption of shipping through the Strait of Hormuz, as the US and Iran maintain a pause in hostilities.

In economic news, Pakistan and China strengthened their bilateral ties with the signing of investment and commercial agreements valued at approximately $1.4 billion. This move is expected to enhance industrial collaboration, technology transfer, and local manufacturing. AHL anticipates that after a period of consolidation, the KSE-100 could target the 180,000-point mark in the near term.

Total trading volume decreased to 958 million shares, down from Monday’s 1.03 billion shares. The total value of shares traded reached Rs41.6 billion.

In the ready market, 495 companies were traded, with 156 stocks closing higher, 306 closing lower, and 33 remaining unchanged.

Cnergyico Pk led in volume with 273.1 million shares traded, rising Rs0.19 to close at Rs10.95. According to the National Clearing Company, foreign investors purchased shares worth Rs395 million.

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