KARACHI: Trading on the Pakistan Stock Exchange started in the outgoing week on a negative note as investors worried about a hike in the policy rate by the central bank.

The stock market celebrated with the benchmark index sliding up to the green territory after the central bank kept the interest rate unchanged.

But the decision failed to sustain the positive momentum for long, thanks to the rise of international oil prices to a seven-year high, according to Arif Habib Ltd.

“Moreover, rising (number of) Covid-19 cases and the postponement of the International Monetary Fund’s (IMF) review kept the market range-bound,” it said, adding that a reduction in the cut-off yields of treasury bills by 68 basis points provided resistance against the bears.

The stock market welcomed the legislation on the central bank’s autonomy, which will result in the disbursement of $1 billion after getting the final nod of approval from the IMF’s executive board in its meeting next month.

As a result, the benchmark index closed at 45,078 points after gaining 60 points or 0.13 per cent on a week-on-week basis.

Sector-wise, positive contributions came from cement (55 points), power generation and distribution (45 points), food and personal care (30 points), fertiliser (26 points) and commercial banking (24 points).

Sectors that contributed negatively to the index were technology and communication (52 points), oil and gas exploration (50 points) and automobile (14 points).

Scrip-wise, positive contributors were The Hub Power Company Ltd (50 points), Bank Alfalah Ltd (38 points), Lucky Cement Ltd (36 points), Fauji Fertiliser Company Ltd (32 points) and TRG Pakistan Ltd (30 points).

Foreign selling continued in the outgoing week, clocking in at $4 million versus a net sell of $2.09m a week ago.

Major selling was witnessed in technology and communication ($2.4m) and cement ($1.3m). On the local front, buying was reported by companies ($19.5m) and mutual funds ($4.8m).

The daily average volume clocked in at 187m shares, down 7pc from a week ago, while the daily average value settled at $38m, down 9pc week-on-week.

According to AKD Securities Ltd, the meeting of the IMF’s executive board on Feb 2 may provide the much-needed trigger to the stock market. It’ll invite back the bulls to re-rate the extremely low valuations, it added.

“We expect the market to ignore the oil rally for now as the positive news flow ahead calls for going long in the market,” it said.

Correction: The earnings report of Lucky Cement Ltd published on Jan 29 mistakenly referred to the Oct-Dec period as third quarter. It should’ve identified the three-month period as second quarter. The error is regretted.

Published in Dawn, January 30th, 2022