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KARACHI: As the market moved in sympathy with the news flow, the KSE-100 index plummeted for the fifth consecutive week recording a loss of 434 points (1.10 per cent) to settle at 38,646 points.

It represented the lowest weekly closing in 76 weeks since June 4, 2016. As the investors chased the stocks to unwind positions or cherry-pick value scrips, the week saw two bearish and three bullish sessions.

“Market sentiment cratered under a ‘controlled’ devaluation exercise by the SBP which saw the rupee lose 4.6pc against the dollar, leading participants to raise concerns over the knock-on effects on the import bill, inflation and consumer confidence,” stated AKD Research.

Foreign investors were net sellers of stocks worth $8.87m during the week with “Overseas Pakistanis” pulling out almost $4.41m. Foreign selling was concentrated in commercial banks ($13.1m), other sector ($2.4m), telecom ($2.3m) and cement ($2.0m). Among local participants banks picked up stocks valued at $11.27m, followed by companies ($10.7m) and mutual funds ($6.53m). Individuals and brokers stood out as net sellers.

Average daily volume decreased 4.39pc over the preceding week to 135m shares. Top 5 volume leaders included: TRG (67.23m shares), KEL (51.39m), PAEL (36.25m), WTL (30.54m) and ANL (22.81m).

The traded value increased 15pc to $62m depicting considerable activity in main board stocks.

According to Topline Securities the following stocks were responsible for eroding 255 points from the index: Lucky Cement down 8pc, ISL 11pc, DG Khan Cement 7pc, The Searle 7pc and UBL 2pc.

Lead gainers were led by PPL up 3pc, Engro Corp 3pc, HBL 2pc, OGDC 1pc and SNGP 5pc, adding 208 points.

Arif Habib Research noted the sector-wise negative contributions came from cement (215 points), engineering (83 points), OMCs (53 points), auto assembler (52 points) and pharmaceutical (45 points).

Brokerage Aba Ali Habib pointed out that the textile sector remained in the limelight as investors picked up stocks hoping the devaluation would boost textile exports.

Some key economic news included Prime Minister Shahid Khaqan Abbasi saying his administration has “no plans” to weaken the rupee further after the central bank started devaluing the currency last week.

Trade deficit in 5MFY18 widened to $15.03bn (up 29pc year-on-year) ; workers’ remittances up 1.3pc to $8.0bn and automobile sales increased 4pc as the year-end effect kicked in.

OUTLOOK: Market pundits offered mixed prognosis for the upcoming week. One brokerage thought that the apex court judgments on two key cases provided win-win situation to the government and the major opposition party, which could result in relatively stable political environment going forward.

“This along with much-awaited devaluation exercise attracting higher foreign interest and encouraging participation by individuals and mutual funds at current levels give weight to wider consolidation as we approach the year-end window-dressing period”.

But another equally big brokerage wrote in its weekly report that in the upcoming week, the market would remain range-bound due to lack of triggers. E&P sector was reckoned to remain in the limelight as a result of rupee depreciation.

Others said that lack of clarity remained on next year’s elections and macroeconomic front which could dent investor confidence.

Published in Dawn, December 17th, 2017