The benchmark index of the Pakistan Stock Exchange (PSX) closed the week at 44,872 points, dropping a total of 202 points, or 0.4%, since the previous week.
Trading began on Monday on a negative note as rising global commodity prices loomed over the mood of investors.
According to Arif Habib Ltd., Coal prices touched a record high of $200.50 per tonne as the Arab Light Price reached a three-year high of $80.20 per barrel.
Pakistani rupee continuously depreciated against the dollar and reached a peak of 170.66. This devaluation of the local currency further exacerbated the negative sentiment and fuelled economic concerns.
Arif Habib Ltd. further added, “Moreover, the market experienced a meltdown after a month-old Republican draft bill that proposed to investigate Pakistan’s involvement in the Taliban’s takeover in Afghanistan resurfaced,”.
Some relief came from the improving expectations about the resumption of the program with the International Monetary Fund (IMF) as the government announced policies aimed at curbing the imports.
In terms of sectors, the ones with negative contributions are banking (117 points), pharmaceutical (47 points), fertilizer (32 points), cement (25 points) and insurance (21 points). Sectors that had a positive contribution to the index include oil and gas exploration (35 points) as well as oil and gas marketing (20 points).
Scrip-wise, negative contributors comprise MCB Bank (84 points), Habib Bank (84 points), Fauji Fertiliser Company (42 points), Lucky Cement (33 points), and United Bank (30 points). Shares that made positive contributions to the index were Meezan Bank (55 points), Pakistan Oilfields Ltd (47 points), and K-Electric (24 points).
Foreign investors sold $ 21.9 million worth of equities
Foreign selling amounted to $21.9 million against the net buying of $6.7m in the previous week. Major selling took place in banking ($13.5m) and energy exploration and production ($4.3m) sectors.
Commercial banks ($10.1m) and insurance companies ($8.1m) reported net buying. The average daily volume remained 355m shares, down 8pc in comparison to the previous week, while the average value traded was $76m, up 3pc week-on-week.
According to AKD Securities, the stock market will be impacted by the upcoming results season and the IMF review once the formal talks scheduled for next week take place.
AKD Securities said, “The government seems to be preparing for strict measures to increase the tax base. Meanwhile, gas tariff hikes seem to be a possibility as well. Investors should adopt a top-down approach to investing where the possibility of further interest rate hikes could bring the banking sector into the limelight,”.
