By Hamid Mahmood
ISLAMABAD, December 15 (INP-WealthPK): The market opened the last week on a dismal note, carrying over the gloom from the previous week due to the growing trade imbalance and rising inflation, while an alleged Omicron case in Karachi aggravated the mood.
The momentum shifted once the new COVID version was determined to be non-lethal. Furthermore, the anticipation of resolving the gas circular debt maintained the market’s positive momentum. However, the stocks were unable to be extended, as concern was raised by the increase in the policy rate, which was accompanied by the ongoing depreciation of the Pakistani rupee against the US dollar — reaching a new low of PKR177.71 on December 10. Nonetheless, the benchmark KSE-100 Index started at 43,233 points and concluded at 43,396 points, up 163 points or 0.38 percent from the previous week.
|Index||Week End||Week Start||Change||% Δ|
|KSE 100 Index||43395.78||43233||162.78||0.37652|
|All Shares Index||29769||29611||158.00||0.53359|
|KSE 30 Index||16901||16718||183.00||1.09463|
|KMI 30 Index||69790||69238||552.00||0.79725|
On Monday, the stocks seesawed to conclude a sluggish day hardly altered in a mostly risk-off trade as economic noise lingered. The KSE-100 Index rose by 47.94 points, or 0.11 percent, to 43,280.77 points, after touching a high of 43,552.41 and a low of 42,972.61 during the day.
Stocks soared on Tuesday, as foreign markets reacted favorably to reports that Omicron, a Covid-19 Variant from South Africa, was not as lethal as previously assumed and the preliminary data was encouraging. The KSE-100 Index up 572.72 points, or 1.32 percent, to 43,853.49 points, after hitting the intra-day high of 44,065.89 and low of 43,280.77.
Stocks finished relatively steady on Wednesday, generating little headlines as the wounded economy continues to walk a tightrope, keeping investors on the sidelines. The KSE 100 Index fell by 6.2 points, or 0.02 percent, to 43,846.87 points, with the highest and lowest values during the day’s trading being 44,138.97 and 43,652.29, respectively.
Stocks fell on Thursday as investors hedged their bets in anticipation of an aggressively hawkish monetary policy, which they think could stifle economic development. The KSE-100 Index slid 328.03 points, or 0.75 percent, to 43,518.84 points, touching the daily high of 43,997.73 points and low of 43,273.76 points.
Given the bleak economic picture, stocks continued to fall on Friday, as the central bank hawks prepared for a major tightening to combat inflationary flames at a monetary policy meeting next week. The KSE 100 Index dropped 123.06 points (0.28 percent) to 43,395.78 points, ranging from 43,051.30 to 43,607.51 points during the trading session.
Foreign investors sold shares last week, making a profit of up to $0.99 million. Investors’ trust in the aforementioned factors was eroded, resulting in these sales. Meanwhile, the mutual fund went on sale and made $4.24 million, which was the largest sale of the week. Brokers followed closely with a profit of up to $1.74 million. Other groups purchased up to $3.87 million, which was the greatest amount purchased last week. Local firms then bought shares worth up to $2.13 million.
The market is projected to remain range-bound this week, according to analysts. On the 14th of December 2021, the monetary policy will be announced, with an expected rise of 100 basis points. Any hike in the benchmark policy rate higher than this level will impact the outlook for highly leveraged equities even further.
Furthermore, a mini-budget is likely to be presented in the near future, and the market will respond to any new tariffs or subsidies imposed, re-imposed, or removed. Banking sectors (Faysal bank, Habib Bank, Muslim Commercial Bank), petroleum (Pakistan State Oil, Oil & Gas development company), automobile (Indus motor) and cement (Lucky cement) sectors are the favored stocks for the ongoing week.