Stock market remains under pressure during outgoing week
During the week, market shed 883 points or 2.1 percent to fall below the 41,000 level.
KARACHI (Dunya News) - Stock market remained under pressure during the outgoing week as lack of clarity on economic issues, due to delays in key economic decisions, turned market sentiment negative.
During the week, market shed 883 points or 2.1 percent to fall below the 41,000 level closing at 40885 points, erasing most of the gains made in the period post general elections 2018.
To recall, this is the first time market has closed below 41,000 since elections. Sector-wise negative contributions came from i) Cement down 169 points amid weak dispatches and declining prices, Fertilizer down 140pts, Oil & Gas Exploration Companies down 99 points and Oil & Gas Marketing down 91pts owed to decline in petroleum sales Foreign selling continued this week clocking-in at $9.9 million compared to a net sell of $10.0 million last week.
Volumes during the week settled at 139 million shares, down by 22 percent compared with preceding week while value traded arrived at $39 million, down by 36 percent on week on week basis.
An analyst from Arif Habib Limited said that investors remained cautious during the week due to demanding economic decisions emerging from the new government. These included reported plans to increase industrial gas prices by 26% (average across-the-board increase of 46%), followed by Economic Advisory Council’s (EAC) recommendations of withdrawing subsidies.
This was in addition to Economic Coordination Committee’s (ECC) approval of Rs 2 per unit hike in electricity prices. Where the price hike is anticipated to partially ease the Gas utilities’ ongoing cash flow constraints, investor sentiments in Sui Northern Gas Pipeline and Sui Southern Gas Pipeline were remained negative during the period under review.
According to an analyst from BMA Capital Management with curtains drawing on the result season, investors’ focus is likely to be more tilted towards economic reforms. “We highlight that any further delays or indecisiveness on government’s front to execute politically unpopular decisions may further drag the index performance and volumes”, he said.
Details by Haris Zamir
