KARACHI: Stocks lost some mojo in the outgoing week with the KSE-100 index advancing at a slower pace by 342 points (0.91 per cent) with closing at 37,926.

Investors saw choppy trade with the first two sessions lifting the index up by 980 points, followed by the last two sessions that dragged it down by 1,463 points due to rising T-bill yields in three- and 12-month papers.

The Monetary Policy Committee meeting announced the decision post close of trading hours on Friday, keeping the policy rate unchanged at 13.25pc, which was in line with expectations as the market lost hopes of a rate cut.

Equities moved in tandem with the news flow during the week. Many market men shared the view that economy was finally reaching stabilisation after painful consolidation measures.

The current account return to a surplus after 3.5 years, textile exports up 14pc month-wise and 7pc on yearly basis in October and the International Monetary Fund signal to release second tranche of $450 million to tackle circular debt, after the successful conclusion of its review lifted investor sentiments.

Bears rushed in amid profit-taking on implementation of axle load policy and higher inflationary readings. On the political front, investors were encouraged by the decision of government to grant permission to former PM Nawaz Sharif to proceed for medical treatment abroad. The JUI-F ended the march which was another positive.

Foreign buying was witnessed, clocking in at $8.5m compared to a net buy of $4.2m the preceding week. Their inflow was noted in commercial banks at $6.7m and fertiliser $3.6m. On the domestic side, banks/DFIs dumped stocks worth $15.2m followed by insurance companies which sold shares valued at 2.6m while individuals mopped up much of the liquidity amounting to $11.89m.

Investor participation continued to remain high with average volume registering a surge of 15pc at 353m shares and average traded value at $79m, up 23pc.

Sector-wise positive contributions came from power generation and distribution at 140 points, fertilizer 102 and oil and gas marketing companies 66 while decline came from commercial banks, lower by 74 points, transport 15 and refinery 11. Scrip-wise index received support from Hub Power, increasing by 132 points, Fauji Fertiliser 94, Pakistan State Oil 40, Lucky 32 and National Foods 29.

Going forward, a bunch of market pundits expect sentiments to remain positive with the improvement in key economic indicators as foreign reserves were rising amid investments in T-bills (reaching $1 billion) from during this fiscal year.

The jitters over the monetary policy where State Bank decided to maintain key rate at 13.25pc were also over as it turned out to be a neutral event. The rollover week, however, was thought to keep the index range-bound during the next five days.

Published in Dawn, November 24th, 2019