KARACHI: The trading on the Pakistan Stock Exchange (PSX) began on a negative note in the outgoing week amidst a lack of positive triggers.

According to Arif Habib Ltd, negative sentiments were on account of a widening trade deficit and surging inflation. An alleged case of Omicron, the latest variant of Covid-19, in Karachi further deteriorated the investors’ sentiments.

However, the overall mood changed after the doctors found the variant to be non-lethal. Moreover, encouraging cement despatches, which went up seven per cent year-on-year, along with the expected resolution of the gas circular debt kept the momentum positive. But nervousness took over soon afterwards on the expectation of a hike in the benchmark interest rate.

As a result, the KSE-100 index closed at 43,396 points, gaining 163 points or 0.38pc on a week-on-week basis.

Sector-wise, positive contributions came from oil and gas exploration (320 points), technology and communication (257 points), food and personal care (32 points), chemical (29 points) and insurance (10 points).

Sectors that contributed negatively to the benchmark index were commercial banking (187 points) and cement (112 points).

Share-wise, positive contributors were TRG Pakistan Ltd (208 points), Pakistan Petroleum Ltd (155 points), Oil and Gas Development Company (101 points), Systems Ltd (49 points) and Mari Petroleum Ltd (34 points). Meanwhile, negative contributors were Engro Corporation (66 points), Habib Bank Ltd (64 points) and United Bank Ltd (44 points).

Foreign selling slowed down in the outgoing week and amounted to $1m versus a net sell of $62.84m in the preceding week. Major selling was witnessed in cement ($1.2m), fertiliser ($0.5m) and exploration and production ($0.3m).

On the local front, buying was reported by “other organisations” ($3.9m) followed by companies ($2.1m) and individuals ($1.3m). The daily average volume clocked in at 204m shares, down 36pc from a week ago, while the average value traded settled at $42m, down 54pc on a weekly basis.

AKD Securities said the future direction of the stock market will partly depend on a number of data points, including the monetary policy announcement due on Tuesday. The brokerage expects an increase of 125-150 basis points in the benchmark interest rate.

Another important data point, it says, will be the trade deficit figure. A decline in imports for December will provide the market with a sigh of relief. “Overall, we continue to advocate for thematic plays, which include banks (on monetary tightening), construction-driven sectors (cements and steel) and textiles (on devaluations and strong export prospects),” it said.

Published in Dawn, December 12th, 2021