KARACHI: Pakistan stocks market took a breather adjusting 1.95 percent during the week ended May 19, 2017 and investors flocked to book profits as MSCI upgrade euphoria settled down ahead of monetary policy statement and federal budget, dealers said.

Adnan Sami in a report issued by Topline Securities said post MSCI review profit taking peeled 1.95 percent off the KSE-100 shares index. “Pressure was also seen later in the week due to a risk-off approach after the Comey Memo roiled global markets.”

The KSE-100 shares index shed 1.95 percent or 1008.88 points to close the week at 50,742.03 points. KSE-30 shares index lost 2.69 percent or 741.75 percent to end at 26,787.33 points.

“Post MSCI review, the market has retraced 3.1 percent or 1646 points from May 15th all time high closing of 52,388 points,” Sami added.

Average trading volume remained flat clocking in at 350 million shares/day with retail favorites dominating the volumes charts.

On a sector wise basis banks down 3.6 percent, cements down 3.8 percent and power generation companies down 4.1 percent were the major laggards.

“In the power generation sector Hub power Company (HUBC) down 7.43 percent led the downside on reported foreign selling. While major banks succumbed to profit taking after MSCI inspired rally,” a report issued by Elixir Securities noted.

Foreigners remained net sellers during the week offloading securities worth $16.4 million.

An analyst at BIPL Securities said the week started off on a bullish note with the index gaining 1.2 percent on the first trading session of the week on the back of MSCI euphoria. “However, confusion regarding pro forma weight in the MSCI Emerging Market index resulted in bearish sentiments for the remaining part of the week”.

MSCI constituents i.e. Habib Bank (HBL), United Bank (UBL), Lucky Cement (LUCK) and MCB Bank (MCB) led the downside, cumulatively contributing 664 points to the index downside in the outgoing week.

Faizan Ahmed in a report issued by JS Global Capital said local institutional investors such as banks and local companies stayed sellers with respective $4.8 million and $4.7 million worth of net selling during the week, putting pressure on the overall index.

“On the other hand, local individual investors continued to show optimism with $6.8 million worth of net buying”.

During the week, National Accounts Committee (NAC) released provisional GDP growth data for FY17 wherein country’s economy grew by 5.28 percent. Furthermore, Annual Plan Coordination Committee approved Rs2.113 trillion for next year’s public sector development program (PSDP). Also, State Bank of Pakistan (SBP) issued a banking license to Bank of China.

Formal inclusion in MSCI EM Index and the upcoming budget are the main triggers in the offing with foreign flows to likely set the direction for the coming month. While any budgetary surprises would guide the momentum for specific stocks. Analysts expect the upcoming budget to be largely neutral for the market.