KARACHI: Equities could not build on the record nine-day straight climb in stocks, although the KSE-100 index declined over a thousand points and closed below 109000 on Tuesday in a new round of the selling spree.
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It had opened in the green at that, yes the overnight bullish run was on and spearheaded by the optimism over an expected soon rate cut. Unfortunately, the stream of negative information dragged the investors up and down intraday high and low were established at 1,789 and 2,259 points respectively.
Arif Habib Corporation, Stocks bearish on global equities downturn on geopolitical tensions in the Middle East and dismal remittances falling by 5pc month on month in November said Ahsan Mehanti.
He also said consolidation with worries for government tax collection scarcity, frail global crude oil prices, and slippages in IMF’s targets under EFF lowered investors’ confidence.
Topline Securities Ltd said the KSE-100 was the most sensitive and very volatile benchmark index currently witnessing a broad trading band of +/ – 4,000 points during today’s trading session. The much-needed profit booking seized the moment and the index touched a high of 111759.58 and a low of 107711.40 points before wrapping up the week at 108896 points – down 1073.74.
The session began uniformly due to buying indications noted in major sectors following a better macroeconomic performance in the country. However, this renewal was short-lived as investors decided to take profit, especially in heavyweights thus a steep intraday Sell. However, the market managed to recover some of the lost ground to stem the decline at least close to the lows which points to the fact that there is fundamental bullish investor sentiment somewhere anyway.
Sazgar Engineering Works Ltd another auto manufacturing firm was also down by 5.50pc and closed below the prior day’s rate because of MoM contraction in four-wheeler sales. In November the sales units hit the figure of 584 compared to 1002 business units sold in October.
Questions associated with the ADR have emerged in the banking sector particularly unsettling the country’s four bleak business entities, inclusive of Bank Al-Habib, MCB Bank, United Bank, and Bank Alfalah all of which have shut down in the red zone.
Mari the index benefited from 508 points from Lucky Cement, Attock Refiner, Systems Ltd, and The Searle companies including Attock Cement. On the flip side, UBL, Bank Al-Habib, MCB Bank, Engro Fertiliser, and Engro Corporation cut off 629 points as all these stocks declined.
Trading volume also came down to 1.54 billion shares, down by 3.1 pc, and trading value rose by 14.19 pc to Rs68.8 billion compared to the previous session.
FAQs
1. What is profit-taking in the stock market?
Profit-taking occurs when investors sell stocks to lock in gains after a period of price appreciation.
2. Why does profit-taking cause stock declines?
When many investors sell their shares to realize profits, supply increases and often lowers stock prices.
3. Is profit-taking a sign of market weakness?
Not necessarily. Profit-taking can be a healthy part of market cycles and doesn’t always indicate broader market weakness.
4. How does profit-taking affect market trends?
Profit-taking can interrupt upward trends temporarily, leading to short-term declines before the market stabilizes or resumes its movement.
5. Which sectors are most affected by profit-taking?
Sectors with high recent gains or speculative stocks are typically more susceptible to profit-taking.
6. How can investors respond to profit-taking dips?
Investors may use declines as buying opportunities for stocks with strong fundamentals or hold through volatility if their investment horizon is long-term.
7. Does profit-taking impact all stocks equally?
No. High-growth or momentum stocks are more likely to experience sharper declines due to profit-taking compared to stable, blue-chip stocks.