KARACHI: The stock market fell in the shortened (four sessions) outgoing week, in line with the global equity rout that rattled markets from Wall Street to Dalal Street.

The KSE-100 index sank 492 points (1.1 per cent) to close the week at 43,809 points. It managed to find a firm foothold after opening 803 points in red on the first trading day as fear gripped investors.

The local bourse was rattled by the sell-off in world markets that led the MSCI World index to its steepest weekly drop in seven years; Dow Jones plunged 6.5pc over the week to Thursday by 1,661 points while the S&P 500 erased all of its gain for the year in what appeared to be its worst week since 2011.

China’s benchmark index suffered heaviest fall in almost two years. According to reliable reports, as many as $5 trillion were wiped of the global stocks.

On the local front, absence of any major positive triggers and continued foreign selling unnerved investors who preferred to book profits or remain on the sidelines.

Foreigners were net sellers of $8.5 million worth shares during the week against net purchases of $12.6m the preceding week.

On the local front, Individuals were net buyers of $8.7m while whereas mutual funds were net sellers of $5.0m worth stocks. Major foreign selling was witnessed in fertilisers $4.4m), cements ($3.1m) and E&P ($1.8m).

The traded volume went down by 4.1pc to 245m shares where Azgard Nine (80.7m shares), TRG Pakistan (73.2m shares), Lotte Chemicals (50.2m shares), Amreli Steels (48.8m shares) and Sui Southern Gas (48.1m shares) were the volume leaders. The traded value down 3pc at $87m.

Sector-wise, downward pressure on the index was exerted by cement down 194 points, followed by oil and gas exploration companies 162 points and fertilisers 45 points.

Positive contributors to the index were food and personal care products which added 32 points and commercial banks 25 points.

Scrip-wise, major laggards in the outgoing week were Pakistan Petroleum, Lucky Cement, DG Khan Cement and Habib Bank, while positive contributions were made by United Bank, Murree Brewery and Colgate-Palmoilve Pakistan.

Pressure on international oil prices (Brent losing 8.9pc in two weeks) resulted in the decline of index heavy weight oil and gas sector, where Oil & Gas Development Company slipped 0.7pc, PPL 5.4pc and Pakistan Oilfield 2.1pc.

Major news flow during the week included: Oil prices dropping to lowest in seven weeks with WTI trading below $61 per barrel amid fears of rising global supplies; the government plans to announce separate amnesty schemes for foreign and local assets with regard to tax rates; possible announcement of budget for next fiscal year by the second week of May; Sindh High Court’s judgment setting aside regulatory duties imposed in October 2017; liquid foreign exchange reserves held by the SBP decreased by $173m to $13.1bn taking total reserves to $19.2bn; the country’s trade deficit touched $3.6bn; a Chinese firm keen to invest $1bn in Pakistan; the cement industry’s capacity utilisation touches 99pc; and urea offtake down 20pc.

Outlook: Market watchers held diverse views on what lies ahead. One reminded that the stocke market was in consolidation phase after rallying 8.8pc in January, driven by unprecedented foreign flows.

Others thought that the market may remain range-bound as investors could be expected to display caution on account of worsening global stocks sell-off.

Moreover, auto number to be released by PAMA should keep the auto sector under limelight. Besides, MSCI’s next quarterly review is scheduled on Feb 12.

In case of change in the constituents’ weights, specific stocks/sectors could perform accordingly.

Moreover, market was anticipated to take direction from the ongoing result season. Key corporate results to be unveiled next week include those of Engro Foods, Aisha Steel Mill Limited, MCB Bank and Maple Leaf Cement.

Published in Dawn, February 11th, 2018