Weekly review: Mixed week for market amid lack of triggers
The stock market witnessed a range-bound week amid sporadic excitement.
The index moved in a narrow band of 180 points and rounded off the week to close marginally up 0.16 per cent at the 1,1905.86-point level.
The market sustained pressure as a result of increased inflation, the Asian Development Bank report cutting down the gross domestic product target, and an increased power tariff during the week.
The consumer price index (CPI), key indicator of inflation, rose for the first time this year to 13.6 per cent in March against the same month of the preceding year.
Although average traded value fell 16 per cent to $37 million and average volumes shrunk by six per cent to 73 million shares, the market enjoyed increased net foreign inflows of $3.4 million during the week.
The spotlight sectors
The oil and gas sector remained in the limelight due to increasing international oil prices and unconfirmed reports of further reserve additions in the Tal block.
Additionally, National Refinery Limited led the sector’s march to higher grounds on the back of better refining margins, following closure of refineries in Japan.
Indus Motors also rallied on expectation of higher demand for its new Corolla model.
Looking ahead
In the coming weeks, the equity market is expected to show some positive activity as the corporate result season for January to March 2011 quarter looks all set to step in.
In this regard, oil and gas sector comprising exploration and production, oil refineries, oil marketing companies sectors will lift a major share of market activity, as oil prices have increased significantly in the last quarter.
Fertiliser, power and cement scrips, coupled with few of the banking sector companies, may further add to market activity in the upcoming results season beginning in mid-April.
The excitement could be restricted to select stocks since March is not typically a payout intensive quarter, according to KASB Securities.
The situation in the Middle East and North Africa region remains important as it will not only shape the outlook for commodity prices but will also play a role in determining potential foreign interest in the emerging markets and the all important foreign inflows, says a KASB Securities research note.
Monday, April 4
The bourse fell on the first trading session of the week as investors remained on the sidelines amid no triggers. Cement stocks attracted better volumes against the broader market on news of the $500 million US loan approval for Diamer-Bhasha dam.
Tuesday, April 5
Investors remained bullish as the market improved on the back of institutional and foreign interest ahead of quarter-end earnings announcements.
Late buying by state funds in oil and fertiliser stocks was witnessed, as investors expected improved quarterly results from the sector.
Wednesday, April 6
Equities witnessed a volatile session, with the index closing marginally above the 11,900-point mark amid better volumes. CPI inflation numbers for March being recorded at 13.16 per cent against 12.91 per cent last month was ignored by investors, who remained active throughout the day.
Thursday, April 7
Bearish activity was witnessed in yet another dull session amid absence of any triggers. The index was dragged down over the course of the day, as local investors preferred to stay on the sidelines, keeping volumes low with second-tier stocks among the top volume generators.
Friday, April 8
Bullish activity was witnessed in the final trading session of the week, driven by the oil sector following a rise in international oil prices. Rumours of improved oil and gas production from one of the key fields raised investor interest, causing the sector to perform well.
Published in The Express Tribune, April 10th, 2011.
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