PSX fails to sustain the 61,000 points level amid profit-taking

KARACHI: Pakistan Stock Exchange (PSX) crossed the psychological barrier of 61,000 points for the first time in history on Wednesday; however, the benchmark KSE-100 index failed to sustain this record high level and ended in the red zone amid profit-taking activity.
The benchmark index shed 228.27 points (-0.38 percent) to close at 60,501.99 points. The market opened on a positive note but turned to profit-taking after the first one-and-a-half hour trading. The recent rally in the stock market is fueled by the staff-level agreement between Pakistan and the International Monetary Fund (IMF) on the first review of the $3 billion Stand-By Arrangement (SBA), which is expected to be approved by the IMF board in December. The agreement would also unlock funds from other multilateral and bilateral partners.
The market’s rally has been fueled by the return of foreign investors’ confidence, with overseas traders injecting the highest in Pakistani stocks in four years, worth $26.29 million in November thus far. The dominant buyers are foreign corporations, with a significant net investment of $27.48 million. They have allocated the majority of their capital, $9.62 million, to commercial banks, while divesting from the oil and gas exploration sector, amounting to $6.76 million in sales.
Analysts said that low valuations, foreign buying, economic stability, currency stability and declining interest rates were also supporting factors for the bullish sentiment. The PSX has been one of the best performing markets in the world this year, posting a growth of over 50 percent. However, some experts have cautioned that the market may face some challenges in the coming months due to political uncertainty, rising inflation, fiscal pressures and external vulnerabilities. They advised investors to adopt a cautious approach and focus on quality stocks with strong fundamentals.
The benchmark index traded in a range of 1,227.66 points, showing an intraday high of 61,555.83 points and an intraday low of 60,328.17 points. Among other indices, the KSE All Share Index shed 128.79 points (-0.32 percent) to close at 40,272.25 points. Similarly, the KMI All Share Islamic Index shed 156.03 points (-0.53 percent) to close at 29,324.04 points.
Total volumes traded for the KSE-100 Index increased by 6.92 million to 343.52 million shares against 336.60 million shares a session earlier. The overall market volumes decreased by 87.45 million shares to 692.22 million shares against 779.67 million shares traded a session earlier.
Among scrips, BOP topped the volumes with 50.05 million shares, followed by CNERGY (35.69 million) and PRL (35.41 million). Stocks that contributed significantly to the volumes included BOP, CNERGY, PRL, WTL and KOSM, which formed over 25 percent of total volumes.
A total of 384 companies traded shares in the stock exchange against 389 companies a session earlier, out of which shares of 141 closed up, shares of 230