KARACHI: Trading on the stock market commenced in the outgoing week on a negative note in reaction to the federal budget announced on June 9.

Arif Habib Ltd said uncertainty over the monetary policy announcement by the State Bank of Pakistan (SBP) also fuelled negative sentiments. The following day, however, the stock market turned positive as the SBP kept the policy rate unchanged.

However, the International Monetary Fund (IMF) raised objections to the budgetary numbers and sought compliance with conditions, such as bridging the financing gap, which brought the bears back to the market.

In addition, Moody’s expressed reservations about Pakistan completing the IMF programme by June 30. The dollar appreciated against the greenback to close at 287.19. Additionally, the SBP-held foreign exc­hange reserves clim­bed up by $107m to $4.01bn.

As a result, the benchmark index closed at 41,301 points after going down 603 points or 1.4pc from a week ago.

Sector-wise, negative contributions came from fertiliser (208 points), oil and gas exploration (163 points), commercial banking (121 points), power (111 points) and technology (60 points).

Sectors that contributed positively to the index were chemicals (183 points), auto assembling (100 points) and miscellaneous (13 points).

Average volumes arrived at 162m shares, down 26pc week-on-week. The average value traded settled at $15m, down 31pc from a week ago.

According to AKD Securities, the stock market is expected to remain range-bound in the short term due to a lack of clarity on the IMF front.

“Additionally, political instability will also contribute to investors’ uncertainty and impact market confidence,” it said, adding that investors should remain cautious while building positions until stability improves.

Published in Dawn, June 18th, 2023