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Bleak economic outlook drags index down

Updated July 21, 2019

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The stock market remained in a tight bear hug during the outgoing week with the benchmark KSE-100 index down by a staggering 1,214 points or 3.60 per cent to close at 32,459 points. — AFP/File
The stock market remained in a tight bear hug during the outgoing week with the benchmark KSE-100 index down by a staggering 1,214 points or 3.60 per cent to close at 32,459 points. — AFP/File

KARACHI: The stock market remained in a tight bear hug during the outgoing week with the benchmark KSE-100 index down by a staggering 1,214 points or 3.60 per cent to close at 32,459 points.

Right from the start, the market came under selling pressure which intensified as the week progressed. It opened with a loss of 2.12pc in the first trading session as the country was slapped with a penalty of $5.8 billion on Reko Diq case over the weekend. As per consensus forecast, the State Bank of Pakistan raised the policy rate by 100 basis points, settling at 8-year high at 13.25pc. While the central bank hinted towards an end of monetary tightening era in its policy statement, it failed to cheer investors whose interest remained centre on fixed income securities.

Sector-wise, exploration and production lost 227 points from the index, followed by commercial banks and fertiliser which cumulatively dragged the index down by 329 points. Power generation and distribution shed 109 points and textile composite 82 points. Scrip-wise major drag came from Pakistan Petroleum, down 6.97pc, Hub Power 4.44pc and Engro Corporation 3.18pc.

Going forward, the premier’s ongoing visit to the US and meeting with President Trump could reset bilateral ties, which is likely to play a pivotal role in rejuvenating sentiments of investors. Moreover, the US could be positively influnced by Pakistan’s arrest of the head of an alleged terror network, which would also help in positive review by Financial Action Task Force in October.

Published in Dawn, July 21st, 2019