The Pakistan Stock Exchange (PSX) experienced a roller coaster trading week as decline in local currency coupled with fears of US sanctions dimmed investor interest. Resultantly, the KSE-100 closed the week at 44,871.7 points after a loss of 202 points or 0.4%.

“The sentiment was fuelled by continuous depreciation of rupee against the US dollar, which fell to the lowest ever level of Rs170.66, raising economic concerns,” stated a report from Arif Habib Limited.

Trading on Monday kicked off with a slide as weakening of local currency sparked a selloff at the bourse.

In addition, high global commodity prices such as coal rates climbing to all-time high of $200.5 per ton tagged with Arab Light price soaring to three-year high of Rs80.2 per barrel aided the dip.

Cherry-picking in the subsequent session helped the market stage a rebound and snap a seven-day losing streak as market participants purchased scrips which had fallen to attractive valuations owing to the prolonged bear run.

A host of encouraging result announcements by heavyweight firms also boosted market sentiment.

Mid-way during the week, the market endured a hammering and fell over 900 points after a group of high-profile US senators moved a bill in the US Senate, seeking imposition of sanctions on the Afghan Taliban that could also be potentially extended to Pakistan.

The index bounced back in the next session and recouped some of the losses after speculation over the US bill being sidelined and investor interest revived at the bourse.

The final day of the week saw the index close partially downward in a range bound session as investor spirits took a hit after rupee fell to all time low of 170.66 against the US dollar in inter-bank market and traded at Rs172-73 in the open market.

“The International Monetary Fund (IMF) review is starting from October 4 and, if successful, it might provide much needed respite to the ailing investment sentiment,” said the AHL report. “Moreover, recent statement of the US secretary of state recognising Pakistan’s crucial part in making talks with Taliban successful will ease off investor concerns.”

Average daily traded volume contracted 8% week-on-week to 355 million shares while average daily traded value rose 3% week-on-week to settle at $76 million.

In terms of sectors, negative contributions came from commercial banks (117 points), pharmaceuticals (47 points), fertilisers (32 points), cement (25 points) and insurance (21 points).

On the flip side, sectors which contributed positively included oil and gas exploration companies (35 points) and oil and gas marketing companies (20 points).

Scrip-wise, negative contributors were MCB (84 points), HBL (84 points), Fauji Fertiliser (42 points), Lucky Cement (33 points) and UBL (30 points). Meanwhile, positive contribution came from Meezan Bank (55 points), Pakistan Oilfields (47 points) and K-Electric (24 points).

Foreigners turned net sellers this week and offloaded scrips worth $21.9 million compared to a net buy of $6.7 million last week.

Major selling was witnessed in commercial banks ($13.5 million) and exploration and production ($4.3 million).

On the local front, buying was reported by commercial banks ($10.1 million) followed by insurance companies ($8.1 million).

Among other major news of the week; foreign exchange reserves declined to $26 billion.

Published in The Express Tribune, October 3rd, 2021.

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