PSX at 8-week low on political noise and economic data
The capital market continued to slide for the second consecutive week.
KARACHI (Dunya News) - The stock market in two weeks almost lost 2000 points on rising political noise and non-acceptance of the demand of the stock brokers by keeping flat the capital gains tax at 15 percent, unnerving the investors pushing the index to hit eight week low.
The capital market continued to slide for the second consecutive week, sliding by 942 points or 2 percent owing to rise in political noise, lack of clarity on macroeconomic front and dispute on budget proposals dampened investor’s sentiments.
The benchmark index closed at a 8-week low of 43,595 index points with market participation improving by 1 percent in volume terms and 3 percent by value.
According to Topline Securities weekly comment, the commercial banks remained the major decliners as the sector eroded 286 points from the index. Continuation of super tax and weak earnings outlook for 2018 kept banking stocks under pressure.
The same analyst said following their investigation it was learnt that cement manufacturers have raised prices by Rs 15 per bag to pass on the impact of higher input cost. Despite this increase prices, the sector remained in red during the week deducting 137 points from the index.
Meanwhile, a report of Habib Metro Financial Services said that the apex court directed leading cement players Best Way Cement and DG Khan Cement to find alternate source of water for their plants located near the Katas Raj temple. The court also directed them to keep Rs 2 billion as security until alternate water supply arrangements are made, keeping the stocks under duress on this account.
Foreigners were net sellers during the week amounting to 4.1 million dollars as against net buying of 0.6 million dollars last week. On the other hand, amongst local investors mutual funds were net buyers of 4.2 million dollars whereas Individuals were net seller of 1.9 million dollars.
Habib Metro Financial Services expect the market will remain choppy as the country heads for transition of power towards an interim government for conduct of general elections. The advent of Ramadan will also play its part in keeping the pace of proceedings in check. The brokerage house has recommend exposure in high yield blue chips.
(Details by Haris Zamir)
