KARACHI: The stock market snapped a two-day rally on Thursday that had carried the KSE-100 index to a 32-month high of 46,000 points.
The benchmark slipped 102.61 points or 0.22 per cent as nervous investors and those who believed the market to be over-bought decided to err on the side of caution and book profit at current levels.
The bulls nonetheless made several efforts to re-enter and pushed the index to an intra-day high by 181 points, but they were driven back as sell-off across the board sent the index scurrying down to an intra-day low by 103 points in the red.
Although concerns remained over the economic slowdown following Moody’s expected subdued growth at 1.5pc in FY21 coupled with the uncertainty over the Covid-19 situation and political headwinds, there was no panic selling.
“A correction at these level is healthy for the market”, a stock strategist said who pointed out that the index had shot through the roof with addition of 18,863 points or 69pc since the Mar 25, 2020 low at 27,229 points.
“Selling was observed in banks, cement, exploration & production sectors, which was caused by a host of reasons including a slight decline in international crude oil prices,” said analysts at Arif Habib Ltd.
Pakistan Petroleum Ltd (PPL), Oil and Gas Development Company (OGDC) and Pakistan Oilfields Ltd (POL) lost values.
Topline Securities said investors remained cautious also on news flow regarding the Petroleum Division’s proposal to disconnect gas supply to all industries using it as fuel for electricity generation and divert it to the national grid.
Mixed sentiment was witnessed in the power sector where Kot Addu Power Company, Lalpir Power, Kohinoor Power and Nishat Power Ltd closed in the green zone and on the flip side, Pakgen Power and Hub Power Company closed in the negative region.
Among fertiliser sector stocks, Fauji Fertiliser Bin Qasim Ltd performed well on the back of subsidy on DAP. There appeared to be a delay in the announcement of the textile policy, which was earlier scheduled to be unveiled on Wednesday.
The cyclicals, cements and steel also contributed to the declining market where Maple Leaf Cement Factory, Cherat Cement Company, D. G. Khan Cement, Pioneer Cement were down among cements whereas steel stocks including Mughal Steel, International Steel Ltd, International Industries Ltd and Crescent Steel and Allied Products closed in the red.
Traded volumes decreased 27pc over the previous day to 620.7 million shares. Among scrips, Hum Network Ltd topped the volumes with 57.5m shares. Traded value backed down by 26pc to Rs19.8 billion.
Scrip-wise, OGDC, Engro Corporation, Hub Power Company, PPL and POL were the major laggards that pulled down the index by 99 points.
Published in Dawn, January 15th, 2021
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