Pakistan stocks likely to remain dull next week

Javed MirzaWeb Editor

24th Jul, 2021. 02:42 pm
Stocks Review

KARACHI: At the end of a dull and shortened week, analysts expect the stock market to remain range-bound to positive in the upcoming week, attributable to the beginning of the results season, which will keep specific companies in the limelight.

“[The] exploration and production (E&P) scrips could perform well due to [the] higher international oil prices. However, pressure on [the] external account, rising infection ratio of novel coronavirus in Pakistan and uptick in CPI [Consumer Price Index] in the upcoming months are downside risks to the index performance,” an analyst at Arif Habib Limited said.

The activity remained dull, amid a short trading week ended July 23, 2021 due to Eid holidays.

The Pakistan Stock Exchange KSE-100 shares index shed 0.08 per cent, or 41.26 points, to close at 47,793.07 points. The KSE-30 shares index shed 0.25 per cent, or 49.11 points, to close at 19,161.24 points.

“Investors’ sentiment was low during the week accredited to Eid holidays, the rupee hitting high of 162.50/dollar), rapid increase in Covid cases in the country, [the] current account deficit of $1.85 billion in FY21 on the back of rise in [the] international crude oil prices and vaccine arrivals,” an analyst at Pearl Securities said.

Foreigners offloaded stocks worth $21.02 million, compared to a net buying of $4.61 million last week. The major selling was witnessed in all other sectors ($21.95 million) and technology sectors ($0.61 million).

On the local front, buying was reported by individuals ($9.02 million); followed by companies ($5.65 million). The average daily volumes for the outgoing week were down 32 per cent to 318 million shares/day, while the value of traded securities declined 26 per cent to $71 million/day.

The dealers said the sentiment remained in check due to the economic concerns on the back of the rising current account deficit, depreciation in the rupee value against the greenback and expected increase in inflationary readings in the upcoming months due to the drastic increase in petroleum product prices and currency depreciation.

Pessimism at the bourse was further fueled by rising Covid infection ratio from 2 per cent to over 6 per cent and the Sindh government announces stricter restrictions to curb the virus spread, as Karachi witnessed a notable surge in its infection ratio to over 20 per cent.

Going forward, the dealers expect the market to remain volatile due to the risk of further lockdowns and upcoming roll-over week.

Adsence 300X250