The Pakistan stock market took a beating in the outgoing week as the surging coronavirus cases triggered a sell-off, pushing the index 1,378 points or 3.3% in the red to close at 39,888 points.
Despite winning yet another reprieve from the Financial Action Task Force (FATF), which decided to retain the country in its grey list for four more months, the heightening regional political tensions and uncertainty in global financial markets greatly hampered progress.
The market witnessed four trading sessions during the week as the Pakistan Stock Exchange remained closed on Friday on account of 12 Rabiul Awwal.
Trading commenced Monday on a positive note, aided by strong financial results and improvement in the rupee-dollar parity. The third successive monthly current account surplus booked last week also helped keep investors in an upbeat mood briefly.
However, this was not enough to keep the bears at bay as they managed to dominate the stock market for the remaining three sessions, given this shortened week coincided with the futures’ rollover.
Turmoil in global equity markets in the wake of panic selling by investors due to the mounting Covid-19 cases and uncertainty over the impending US presidential elections also sent shockwaves to the domestic bourse.
Index-heavy sectors bore the brunt as participants took to offloading shares. Furthermore, decline in oil prices also exerted pressure on E&P stocks.
Thursday, which marked the last trading day of the week, witnessed a bloodbath as the KSE-100 index plummeted nearly 1,300 points after government officials expressed concerns over the rising trajectory of corona cases and announced restrictions in an effort to curb it. In terms of sectors, negative contributions came from commercial banks (499 points), oil and gas exploration companies (247 points), fertiliser (145 points), textile composite (131 points), and oil and gas marketing companies (103 points).
Scrip-wise, negative contributions were led by HBL (149 points), UBL (134 points), POL (111 points), ENGRO (87 points) and OGDC (60 points). Foreign selling continued this week clocking-in at $21.3 million compared to a net sell of $6.9 million last week. Selling was witnessed in cements ($7.6 million) and commercial banks ($4.9 million). On the domestic front, major buying was reported by insurance companies ($7.8 million) and individuals ($6.4 million).
Participation inched up as average volumes arrived at 470 million shares (up 1% week-on-week) while average value traded settled at $117 million (up 20% week-on-week).
Other developments during the week were; Moody’s assigned first-time B3 rating to Wapda, Oil and Gas Regulatory Authority notified increase in gas prices and hike in prices of 94 drugs was notified.
Published in The Express Tribune, November 1st, 2020.
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