Profit-taking bites into optimism rally at PSX
Published February 03, 2022
- Investors adopt "buy the rumour, sell the news" strategy.
- KSE-100 index sheds 256.22 points to settle at 45,862.93.
- Index moved between intra-day high and low of 46,387.64 and 45,829.59.
KARACHI: The Pakistan Stock Exchange (PSX) on Thursday snapped a four-session winning streak owing to profit-booking as investors adopted "buy the rumour, sell the news" strategy after the International Monetary Fund (IMF) approved a $1 billion loan tranche for Pakistan.
“Buy the rumour, sell the news” strategy recognises that rumours have one effect on the stocks and news can have the opposite effect.
The index displayed volatility and moved between intra-day high and low of 46,387.64 and 45,829.59 points respectively.
The absence of positive cues kept investors cautious throughout the trading session. Profit-taking was noted in cement, exploration and production and banks sectors.
Earlier, taking cue from Wednesday’s performance, stock trading began on a bullish note, but bears soon took over and dominated market proceedings throughout the session.
At the close, the benchmark KSE-100 index shed 256.22 points, or 0.56%, to settle at 45,862.93 points.
In its post-market commentary, Arif Habib Limited noted that the index opened on a positive note as the IMF’s Executive Board approved the loan tranche of $1 billion of its $6 billion Extended Fund Facility (EFF) for Pakistan.
“Physiological level of 46,000 was unable to digest by the investors as profit-taking was witnessed across the board, which led the index to close in the red zone,” it said, adding that mainboard activity remained gloomy.
The brokerage house added that on the flip-side, activity continued to remain side-ways as the market witnessed hefty volumes in the third tier stocks.
Sectors contributing to the performance included miscellaneous (-65.8 points), cement (-51.6 points), banks (-47.9 points), exploration and production (-39.6 points) and power (-18.5 points).
Shares of 369 companies were traded during the session. At the close of trading, 133 scrips closed in the green, 207 in the red, and 29 remained unchanged.
Overall trading volumes dropped to 328 million shares compared with Wednesday’s tally of 360.8 million. The value of shares traded during the day was Rs10.5 billion.
WorldCall Telecom Limited was the volume leader with 32.82 million shares traded, gaining Rs0.05 to close at Rs2.33. It was followed by Telecard Limited with 20.30 million shares traded, losing Rs0.97 to close at Rs17.45, and Ghani Global Holdings with 16.8 million shares traded, losing Rs0.47 to close at Rs22.24.
