KARACHI: The benchmark index of the Pakistan Stock Exchange (PSX) ended the week at 44,872 points, shedding 202 points, or 0.4 per cent, from a week ago.

Trading began this week on a negative note as high global commodity prices dampened the mood of investors.

Coal prices reached an all-time high of $200.50 per tonne as the Arab Light Price touched a three-year high of $80.20 per barrel, according to Arif Habib Ltd.

Continuous depreciation of the rupee against the dollar, which reached the highest level of 170.66, further fuelled the negative sentiment and raised economic concerns.

“Moreover, the market experienced a meltdown after a month-old Republican draft bill that proposed to investigate Pakistan’s involvement in the Taliban’s takeover in Afghanistan resurfaced,” it said.

Some support came from the growing expectations about the country’s re-entry into the International Monetary Fund (IMF) programme as the government announced measures aimed at slowing down imports.

Sector-wise, negative contributions came from banking (117 points), pharmaceutical (47 points), fertiliser (32 points), cement (25 points) and insurance (21 points). Sectors that contributed positively to the index included oil and gas exploration (35 points) as well as oil and gas marketing (20 points).

Scrip-wise, negative contributors were MCB Bank (84 points), Habib Bank (84 points), Fauji Fertiliser Company (42 points), Lucky Cement (33 points) and United Bank (30 points). Shares that contributed positively to the index were Meezan Bank (55 points), Pakistan Oilfields Ltd (47 points) and K-Electric (24 points).

Foreign selling amounted to $21.9 million as opposed to the net buying of $6.7m last week. Major selling was witnessed in banking ($13.5m) and energy exploration and production ($4.3m) sectors.

On the local front, commercial banks ($10.1m) and insurance companies ($8.1m) reported net buying. The average daily volume remained 355m shares, down 8pc from a week ago, while the average value traded was $76m, up 3pc week-on-week.

According to AKD Securities, the stock market is likely to take direction from the upcoming results season and the IMF review as formal talks are expected to begin next week.

“The government seems to be preparing for strict measures to increase the tax base. Meanwhile, gas tariff hikes seem to be a possibility as well. Investors should adopt a top-down approach to investing where the possibility of further interest rate hikes could bring the banking sector into the limelight,” it said.

Published in Dawn, October 3rd, 2021