KARACHI: The stock market continued its upward trend in the outgoing week as China agreed to refinance a $2.24 billion loan while the government engaged in talks with China over the rolling over of its $2bn deposits.

Arif Habib Ltd said the shrinking of the trade deficit by 21.4 per cent on an annual basis to $9.2bn helped the index sustain momentum during the outgoing week.

Furthermore, the rupee appreciated against the greenback and closed at 219.92, up 8.53 or 3.7pc week-on-week. Moreover, Asian Development Bank announced it’d provide aid to the tune of $2.3bn-$2.5bn in flood relief.

However, Moody’s cut Pakistan’s sovereign credit rating from B3 to Caa1 last Thursday owing to increased liquidity and external vulnerability risks. The decision kept the bourse in check in the last two days of trading.

As a result, the benchmark index closed at 42,085 points after gaining 956 points or 2.3pc from a week ago.

Sector-wise, positive contributions came from technology and communication (360 points), power generation and distribution (251 points), cement (129 points), fertiliser (115 points) and chemical (44 points).

Sectors that contributed negatively were miscellaneous (44 points) and paper and board (six points).

Scrip-wise, positive contributors were the Hub Power Company Ltd (227 points), TRG Pakistan Ltd (171 points), Systems Ltd (170 points), Engro Corporation Ltd (66 points) and Engro Fertilisers Ltd (61 points).

Meanwhile, scrip-wise negative contributions came from Pakistan Petroleum Ltd (48 points), Pakistan Services Ltd (41 points), MCB Bank Ltd (26 points), United Bank Ltd (24 points) and Fatima Fertilisers Ltd (11 points).

Foreign buying continued in the outgoing week and clocked in at $4.7m versus a net purchase of $0.15m a week ago. Major buying was witnessed in technology ($6m), power ($0.4m) and cement ($0.3m). On the local front, selling was reported by insurance ($5.7m) and banks ($4.4m).

The average daily volume clocked in at 434m shares, up 118pc week-on-week. The average daily value traded settled at $48m, up 32pc on a weekly basis.

According to AKD Securities, the near-term trajectory of the stock market will depend on the monetary policy announcement on Monday.

Inflation seems to have peaked in the last few months, although the position of foreign exchange reserves still remains alarming, it said.

“Overall, macros remain shaky… we recommend market participants should stay cautious and focus on defensive plays,” it added.

Published in Dawn, October 9th, 2022