Pakistan Stock Exchange (PSX) took a breather on Tuesday after a sharp 4% surge in the benchmark KSE-100 index in the previous session as profit-taking pulled the market down despite continued buying interest in selected stocks.

The KSE-100 shed 638.45 points, or 0.36%, to settle at 177,623.88. During the trading session, it touched the intra-day high of 179,123.01 and low of 177,434.96.

According to Ahmed Sheraz of KASB KTrade, the stock market witnessed a mixed session after the benchmark index had rallied more than 4% on the previous trading day, with investors opting for selective profit-taking while buying interest persisted in certain sectors.

United Bank, Oil & Gas Development Company, Hub Power and Pakistan Petroleum weighed on the KSE-100, while Adamjee Insurance, Attock Refinery, Engro Holdings and Interloop provided support. Sector-wise, commercial banks, oil and gas, and cement remained under pressure, while insurance firms and refineries outperformed.

Refinery stocks drew investor interest following reports of approval of an amended refinery policy, helping the sector outperform. Meanwhile, Pakistan Telecommunication Company reported strong six-month results, showing a notable turnaround in consolidated earnings from a loss of Rs9.8 billion to a profit of Rs4.6 billion.

Sheraz said investors would likely remain focused on policy developments, corporate earnings and sector-specific news flow, alongside developments in the Middle East, for market direction.

According to JS Global analyst Nawaz Ali, following the robust bull-run in the previous session, investors opted to book profits on Tuesday, pushing the KSE-100 index down by 638 points at 177,624. The index traded within a relatively narrow range, during which it hit the intra-day high of 179,123 (+860 points) and the low of 177,435 (-827 points).

The refinery sector was in the spotlight following the approval of amendments to the refinery policy. Despite the correction, market valuations were attractive; therefore, “a buy-on-dips strategy is recommended”, he said.

According to Arif Habib Limited (AHL), the KSE-100 gave back some of its gains following Monday’s outsized rally, with 26 shares advancing against 73 decliners. Adamjee Insurance (+10%), Attock Refinery (+2.96%) and Engro Holdings (+0.34%) contributed the most to the index gains, while UBL (-0.96%), OGDC (-0.76%) and Hubco (-0.61%) emerged as the biggest drags.

AHL noted that the US and Iran extended the pause in hostilities as attention shifted towards talks between Iran and Oman over the resumption of shipping traffic through the Strait of Hormuz.

Meanwhile, Pakistan and China strengthened their economic partnership with the signing of investment and commercial agreements worth around $1.4 billion during a business conference, which paved the way for greater industrial collaboration, technology transfer and local manufacturing. AHL expects that following some consolidation, the KSE-100’s near-term target will be 180,000 points.

Overall trading volumes decreased to 958 million shares compared with Monday’s total of 1.03 billion. The value of shares traded during the day came in at Rs41.6 billion.

In the ready market, shares of 495 companies were traded. Of these, 156 stocks closed higher, 306 fell and 33 remained unchanged.

Cnergyico Pk was the volume leader with trading in 273.1 million shares, rising Rs0.19 to close at Rs10.95. Foreign investors bought shares worth Rs395 million, the National Clearing Company reported.