KARACHI: Stocks fell for the second consecutive week, with the KSE-100 index declining by 179 points to close below the psychological barrier of 47,000 at 46,957 points. The index moved between the low and high of 46,873 and 47,629 points.

Investors initially worried over the geopolitical uncertainty and later in the week over the economy which was thought to be in jeopardy as the trade deficit for the month of August clocked in at Rs4.1 billion — the highest-ever for a single month.

CPI reading at 8.4 per cent year-on-year in August compared to 8.2pc in the same period last year and the continuing decline in the rupee value were also instrumental in driving away risk-averse investors from the market.

Foreign investors sold shares worth $5.9 million ahead of the MSCI decision on reclassification due on September 7. Outflow was witnessed from commercial banks of $4.3m, cement $1.3m and exploration and production $0.8m.

On the domestic front, individuals were ahead in buying, picking up shares of $5.1m with insurance companies not far behind with purchases of $4.0m. Mutual funds were the principal net sellers of $3.84m equity as they had to meet higher redemption orders.

Average daily traded volumes clocked-in at 462m shares — up 20pc week-on-week. Top volume leader was WorldCall Telecom which saw 309m shares change hands. Average daily value traded settled at $83m.

Sector-wise negative contributions to the index came from commercial banks (301 points), automobile assemblers (77 points), textile composite (20 points), and oil & gas marketing companies (19 points).

The promising cement sector also succumbed to selling pressure wiping away 100 points from the Index; the sector was marred by the continuing surge in international coal prices.

Sectors that provided support to the Index included technology & communication (176 points), power generation & distribution (77 points) and refinery (51 points). Scrip-wise those that dragged the Index down included HBL (105 points), MEBL (80 points), UBL (63 points), MCB (48 points) and MLCF (24 points).

On the flip side, technology stock Systems Limited added the heaviest 141 points, followed by Hubco 82 points and TRG 33 points.

Going forward, the decisive factors that could determine the market trend turn out to be numerous, so even the sharpest of the gurus would not hazard a guess on which way the wind might blow. The major factor (more important from the foreign investors’ perspective) would be the MSCI verdict relating to the reclassification of PSX.

Other than that further depreciation of the rupee against the dollar and the news flow relating to the devastations of the fourth wave of Covid-19 regardless of accelerated pace of vaccination would impact investor sentiments.

Published in Dawn, September 5th, 2021