Stocks have been low for most of the week as speculation about the virus continues to drag on sentiment, and while the trend is likely to end, a highly lucrative financial position by the central bank could restore the market’s momentum. For the better, dealers said.
The KSE-100 index of Pakistan Stock Exchange (PSE) lost 0.94% or 382 points during the outgoing week and ended at 40,187 points on Saturday.
Mohammad Saeed Khalid, Head of Research in the Capital City, said, “We expect the unexpected move by the State Bank of Pakistan to cut the benchmark policy rate due to the recurrence of COVID-19 epidemics in the country. The stock market will be supported. ”
“We also believe that the NCPI (National Consumer Price Index) inflation in November may increase the likelihood of a rapid purchase,” he said.
He added that the expected announcement of the number of fertilizers for 4MFY21 is also likely to improve sentiment in the sector.
Muhammad Jawad Vohra of BMA Capital Management Equity Desk said, “Considering the better economic indicators, we expect the market to remain stable in the coming weeks, but due to the second COVID-19 wave. Caution is advised amid concerns of possible smart lockdown. “
“High inflation continues to be a concern as the central bank prepares to announce its monetary policy next week,” Vehra added.
During the week, investor participation fell by 41%. The average daily volume increased by 171 million shares, while the average trading price fell 34% to 43 43 million.
Broker Arif Habib Limited said in its weekly market report, “We highlight the deteriorating COVID situation as a major threat to the local investment environment.”
“However, the government has so far completely avoided lockdown across the country. If it is banned, it could be a serious negative for the course.”
“Improving economic fundamentals and improving strong corporate profitability trends could once again reverse the risks associated with the eradication of the corona virus,” he said.
Foreign investors sold equity worth 6 6.6 million last week, compared to a net sale of $ 7.4 million.
Commercial banks ($ 4.0 million) and the cement sector (2. 2.1 million) saw large sales. On the local front, large purchases were reported by individuals (5.5 million) and companies (3.4 million).
The increase in COVID-19 cases led to a decline in equities during the week, with the 7-day average of the infection rate exceeding 6.5% and active cases crossing the 33,500 mark for the first time in the last 117 days. gone.
The drug maker Pfizer found some positive results after announcing its COVID-19 vaccine as 95% more effective than previous claims of 90%. Similarly, another US healthcare company, Modern, revealed that its vaccine success rate is 95%. However, the vaccine rally proved to be short-lived. Following the announcements, the WTI and Brent Oil Index rose 5% and 4.2%, respectively.
In terms of sectors, the negative contributions came from fertilizer (94 points), oil and gas exploration companies (81 81 points), and cement (points).
The script-wise negative partnership was led by DAWH (68 points), OGDC (45 points), and SYS (44 points).
On the flip side, banks (28 points) saw major sectoral gains, while UBL (55 points) and MEBL (15 points) led the positive partnership, according to the script.