KARACHI: The stock market remained bearish in the outgoing week as the benchmark index hit a 26-month low last Wednesday.

Arif Habib Ltd said the main reason for the decline was uncertainty on the political front. The announcement by the PTI that it’d dissolve the Punjab Assembly was followed by a no-confidence motion against the provincial chief minister — a stretched-out episode of political confrontation that took a heavy toll on stock prices throughout the week.

On the economic front, the central bank’s foreign exchange reserves decreased by $584 million to $6.1 billion, lowest since April 2014.

Furthermore, the current account deficit decreased to a 19-month low of $276m in November. Foreign direct investment went down 48 per cent to $82m in November. Moreover, the real effective exchange rate clocked in at 98.85 in November versus 100.19 in October. In addition, the rupee depreciated by 0.13pc week-on-week against the dollar and closed at 225.64.

As a result, the index closed at 39,669 points after losing 1,632 points or 3.95pc on a weekly basis.

Sector-wise, negative contributions came from technology and communication (379 points), fertiliser (283 points), banking (235 points), cement (161 points) and food and personal care products (101 points).

Sectors that contributed positively were miscellaneous (20 points) and tobacco (five points).

Scrip-wise, negative contributors were TRG Pakistan Ltd (231 points), Engro Corporation Ltd (145 points), Systems Ltd (124 points), Mari Petroleum Company Ltd (77 points) and MCB Bank Ltd (63 points).

Meanwhile, positive contributions came from Pakistan Petroleum Ltd (28 points), Pakistan Services Ltd (26 points), Lotte Chemical Pakistan Ltd (24 points), Adamjee Insurance Company Ltd (nine points) and Oil and Gas Development Company Ltd (eight points).

Foreign selling clocked in at $3.3m versus a net sale of $9.6m a week ago. Major selling was witnessed in commercial bank ($4.2m) and exploration and production ($0.4m). On the local front, buying was reported by banks ($7.9m) and companies ($5m). The average daily volume clocked in at 180.2m shares, up 11.3pc from a week ago. The average daily value traded settled at $21.7m, up 7.7pc week-on-week.

According to AKD Securities, the stock market is expected to witness pressure in the near future. “The sentiment is further worsened by the advent of security tensions in the northern part of the country,” it said, noting that further tightening of the interest rate by the central bank seems to be on the cards, which may keep sentiments in the equity markets muted.

Published in Dawn, December 25th, 2022

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