KARACHI: Trading on the stock exchange commenced on a negative note in the outgoing week amid a surprising policy rate hike by the central bank, which increased the benchmark rate by 100 basis points to 16 per cent. The negative mood was reinforced by rising political noise.

Arif Habib Ltd said the momentum briefly turned green after the State Bank of Pakistan (SBP) received $500 million from Asian Infrastructure Investment Bank.

That led the rupee to appreciate during the week against the greenback by 0.11pc to settle at 223.69.

However, the trading mood shifted back to the negative zone after official data depicted an increase in the trade deficit by 24pc on a monthly basis in November.

Headline inflation in November also clocked in at 23.84pc, slightly higher from the preceding month’s reading.

Furthermore, the SBP’s foreign exchange reserves data showed a decline of $327m on a weekly basis.

As a result, the benchmark index of the Pakistan Stock Exchange closed at 42,150 points after shedding 787 points or 1.8pc from a week ago.

Sector-wise, negative contributions came from cement (243 points), technology (101 points), fertiliser (83 points), exploration and production (70 points) and banking (62 points).

Sectors that contributed positively were “miscellaneous” (82 points) and power (48 points).

Scrip-wise, negative contributors were TRG Pakistan Ltd (102 points), Lucky Cement Ltd (79 points), Cherat Cement Company Ltd (43 points), Millat Tractors Ltd (39 points) and Maple Leaf Cement Factory Ltd (38 points).

Meanwhile, scrip-wise positive contributors were Pakistan Services Ltd (87 points), the Hub Power Company Ltd (59 points), Systems Ltd (24 points), Habib Bank Ltd (12 points) and Ibrahim Fibres Ltd (four points).

Foreign buying continued in the outgoing week and settled at $6.6m versus a net purchase of $1.1m in the preceding week.

Major buying was witnessed in exploration and production ($2m), cement ($1.8m) and technology ($1.6m).

On the local front, selling was reported by mutual funds ($6.3m) and broker proprietary trading ($2.1m).

The average daily volume clocked in at 162m shares, up 1pc from a week ago. The average value traded settled at $24m, down 7pc on a week-on-week basis.

According to AKD Securities, the stock market is expected to remain range-bound in the near future.

Any developments regarding the ninth review by the International Monetary Fund will remain in the limelight, with a positive outcome possibly restoring sentiments regarding Pakistan’s external position.

On the other hand, political uncertainty may put further pressure on the market, it said.

“We advise investors should fetch out safer plays/defensive stocks,” it said.

Published in Dawn, December 4th, 2022