KARACHI: The stock market closed flat in the outgoing week, with the KSE-100 index adding a paltry 24 points (0.06 per cent) to settle at 38,586 points.

Pakistan Stock Exchange started out on a robust rally on the first trading day of the week that saw the index gain 738 points. Following the worst performance in 67 weeks ended Friday the Dec 7, with a loss of 1,934 points, the buoyant start to the outgoing week was no less than a day of celebration for the market.

But for the next three days, the market continued to drift south. The buying frenzy on Monday was triggered by the weekend visit of Prime Minister Imran Khan where he met a PSX delegation and assured of several positive measures including allowing carry forward of capital losses up to three years.

The celebrations, however, proved short-lived. As the market lacked any triggers and dark clouds continued to gather on the horizon over an impending economic slowdown, the index quickly corrected for three successive sessions followed by pull-back on the last day, underpinned by confirmation of receipt of second tranche of $1 billion Saudi aid package.

Heavy selling by mutual funds, gas supply constraint from Sui Southern and Sui Northern to CNG stations and captive power plants poured more cold water on investors’ sentiments. Other negative news flow included uncertainty surrounding the International Monetary Fund programme, delay in issuance of $3bn bonds and the initial placing of Pakistan on the US blacklist.

Positive developments relating to the decision by the Supreme Court to allow high rise construction in Karachi, expectations of progress in K-Electric sales and the Asian Development Bank’s $7.5bn lending programme to Pakistan, were discounted by the investors.

Foreign investors offloaded stocks worth $12.9 million, marking the 32nd week of unplugged outflows. Foreign selling was concentrated in exploration and production at $4.43m, commercial banks $3.5m and oil and gas marketing companies $2.5m. On the local front, insurance companies led the bullish sentiments accumulating stocks worth $8.0m, followed by individuals at $7.2m.

Average daily volume shrank by 26pc 121m shares while the traded value fell by 31pc to $40m. Sector-wise contribution to the upside was led by oil and gas exploration, increasing by 118 points, fertilisers 81 points, chemical 46 points, food and personal care products 16 points and cement 10 points.

On the flip side, declining sectors were included commercial banks, decreasing by 62 points primarily due to foreign selling and automobile assemblers 25 points amid weak sales data for Nov’18.

Scrip-wise major gainers were Pakistan Petroleum, gaining 75 points, Fauji Fertiliser 58 points, Engro Corporation 47 points, Lucky Cement 41 points and ICI Pakistan 24 points. On the flip side, MCB was down 1.50pc, Meezan Bank Ltd 5.50pc and TRG Pakistan 7.55pc, together taking away 72 points.

Going forward, market gurus caution that the upcoming week may remain dull amid lack of triggers. Moreover, FTSE rebalancing is expected in the week which might dictate foreign flows along with the announcement of current account figures which could keep investors vigilant. Several analysts offered the dire prognosis that a closing below 38,000-level would open the way for further downside.

Published in Dawn, December 16th, 2018