PSX suffers losses amid Covid surge

Published May 2, 2021
The benchmark KSE 100-index lost 444.41 points, or 0.99 per cent, to close the week at 44,262.35 points.
— AFP/File
The benchmark KSE 100-index lost 444.41 points, or 0.99 per cent, to close the week at 44,262.35 points. — AFP/File

KARACHI: Enhanced restr­i­ctions amid surging Covid third wave did hurt sentiments at the stock market in the rollover week triggering profit-selling by investors with the result the benchmark KSE 100-index lost 444.41 points, or 0.99 per cent, to close the week at 44,262.35 points.

On a month-on-month basis, the index saw a loss of 228.68 points over March 31 closing at 44,491.03. The ong­o­ing result season, despite encouraging corporate earnings, has failed to ignite excitement in the bourse.

The market continued to showcase resistance near the 45,500-level as the index hit a high and a low of 45,952 and 44,152 points, respectively, during the week.

On the other hand, the trading volume averaged at 340 million shares, up 2pc week-over-week. Whereas the traded value clocked in at $119m, an increase of 23pc over the previous week.

The market opened the trading week with a spectacular rally of 976 points, but it couldn’t maintain this upw­ard momentum because the NCOC issued a warning that it could impose complete lock­­d­owns in virus-hit cities because the average positivity rate had crossed the 10pc causing uncertainty among the investors who started offloading their positions in rest of the trading sessions of the week.

BMA Capital in its report said the ongoing result season did little to uplift investor sentiments perhaps due to upcoming long Eidul Fitr holi­days and budget announ­ce­ment right after eid.

Energy stocks remained in limelight due to strong corporate results posted by companies and Economic Coord­ination Committee of the Cabinet meeting during the week to discuss the release of first installment of payments to IPPs. International crude prices were also on an uptrend over the week as expected recovery in summer fuel demand outweighed concerns about higher Covid-19 cases in Brazil and India. Oil prices rose to six-week high as Brent and WTI settled at $67.6 and $64.4 per barrel, respectively.

Major news flow during the week include the country’s foreign exchange reser­ves hit five-year high at $23.520bn and the extension of the Debt Servicing Suspen­sion Initiative (DSSI) from G-20 countries strengthened the rupee against the dollar, fiscal deficit narrowed to Rs1.6 trillion (3.5pc of GDP) during 8MFY21, inflows thro­ugh Roshan Digital Account crossed $1bn mark, PM launched Roshan Apni Car Scheme, Roshan Samaji Khidmat etc.

Going forward, the market is expected to resume its upward trajectory next week in view of improved macroeconomic prospects and strong rupee, but the trading activity to remain range-bound in the near-term due to conclusion of earnings season, increased Covid-19 related restrictions and upcoming eid holidays.

Published in Dawn, May 2nd, 2021

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