A weekly review: Stocks observe fluctuation amid political uncertainty


KARACHI JAN 18 (DNA) – The Pakistan Stock Exchange (PSX) in the outgoing week closed observed fluctuations and closed in a little bit of negative territory amid political uncertainty that marred the overall trading environment while kept investors’ sentiment subdued.

However, the signing of a phase one trade deal between the U.S. and China to ease the ongoing trade war restored a bit of confidence among the investors.

Domestic politics and rising reservations against the ruling party by its allies were also noticed by the investors.

On a weekly basis, the benchmark KSE 100-share Index dropped by 39.28 points as yesterday the Index ended at 43,167.77 points as compared to last Friday’s 43,207.05.

Yesterday, the Index opened at 43,093.16 points and the Index managed to close with gains of 102.67 points or 0.24 per cent at 43,167.77 as the stock market took investors on a roller- coaster ride on the last trading day of the week where the volatility intensified in the second session.

Traders yesterday opined that the market was still in search of a direction, which could be provided by the State Bank monetary policy and the herald of corporate results reporting season next week.

On Thursday, the overall trading volumes jumped to 229.9 million shares compared with Wednesday’s tally of 171.3 million. The value of shares traded during the day was Rs 6.5 billion. The Index opened on a positive note but tumbled soon after and hit an intra-day low of 42,805.73 points amid lack of positive triggers and prevailing negative sentiments among investors due to rising political noise between the political parties. However, recovery was quick as the index managed to power past the 43,000 mark.

On Wednesday, the PSX witnessed bearish trend and closed at 42,993 points as compared to 43,207 points on Tuesday with the negative change of 214 points (0.5 %). A total of 119,954,170 shares were traded compared to the trade of 151,124,910 shares during the previous day, whereas the value of shares traded during the day stood at Rs 5.164 billion as compared to Rs 6.48 billion during last trading day.

Total 345 companies Wednesday transacted shares, out of which 113 recorded gain and 213 sustained losses whereas the share price of 19 companies remained unchanged.

On Tuesday, the market lost just 11.63 points, and closed at 43,207 points as compared to Monday’s 43,218 points. A total of 151,124,910 shares were traded, whereas the value of shares traded during the day stood at Rs 6.48 billion. In total, 366 companies transacted shares in the Stock Market today, out of which 170 recorded gain and 179 sustained losses whereas the share price of 17 companies remained unchanged.

Traders were of the view that after a major run-up since August last year, the index was consolidating at the current levels before moving forward. “Early trade has been witnessing much of the volatility and the index has been fluctuating from negatives to positives and vice-versa.”

A total of 151,124,910 shares were traded Tuesday compared to the trade 199,044,740 shares during Monday, whereas the value of shares traded during the day stood at Rs 6.48 billion as compared to Monday’s Rs 9.15 billion.

The emerging disapproval from Pakistan Tehreek-e-Insaf (PTI) allies over its policies contributed to the slow pace as the disagreements between the PTI government and its allies are being taken as a “sign of a brewing political crisis.”

The previous week witnessed massive overall spike in the stocks as local and foreign investors rampaged across the market to quickly hit upper circuits after the war clouds hanging over the region due to US-Iran hostilities dissipated which provided the investors the much-needed comfort to move funds from gold and money market back to risky assets that may provide higher returns.

There was no major negative news flow that could thwart the market exuberance. On the political front, the belligerent atmosphere in the country took a pause after some reconciliation between the government and the opposition following the consensus passage of Army, Air Force and Navy Amendment Bills.

Earlier, investors’ optimism continued as they saw the market back in the green after two earlier dismal years of negative returns.

From Aug 16, 2019 when the benchmark index had hit the pit at 28,765 points, the market has witnessed a spectacular rally that has carried it up by more than 50pc in fewer than five months.

Improvement on the external front together with stability in the Pakistani Rupee was expected to reassure foreign investors.

Meanwhile, inflationary readings are set to touch peak in January 2020 (this month) with an imminent interest rate cut to follow, domestic investors remain jubilant as well, he said.