Weekly review: KSE-100 closes flat amid lifeless trading

Volumes remained subdued ahead of Muharram holidays

KARACHI:

Lack of any positive triggers kept the stock market at bay as the benchmark KSE-100 index witnessed lifeless trading and closed almost flat, falling 9 points, during the shortened trading week that ended on October 22.

The market witnessed strong resistance at the 34,000-point mark and failed to close over the psychological barrier in any of the four trading days, despite crossing it in intra-day trading. The week was shortened due to the Ashura holidays in the month of Muharram.

Trading was subdued with volumes remaining low throughout the week with the on-going results season failing to make an impression on the market. The banking sector continued to perform well as results started to flow in, but the gains were offset by the poor performance of the oil and gas sector.



The textile sector saw gains as the government announced incentives for the spinning sector while the auto-sector also attracted interest on news of the auto-policy being closer to finalisation. Macroeconomic data was also encouraging as the country’s current account deficit shrank.

The market started the week with light gains but failed to sustain momentum as the oil and gas sector came under pressure. That would remain the case for the remainder of the week, primarily due to global crude oil prices gradually falling over the course of the week. The KSE-100 index ended the week at 33,945 points on Thursday.

The oil and gas sector was again at the center of events at the bourse as crude oil prices slowly crept downwards throughout the week. Additionally, result announcements by Pakistan Petroleum Limited and Pakistan Oilfields were below expectations and proved to be a damper on the market.



The banking sector, on the other hand, continued to recover strongly after earnings announcements by major banks were largely inline with expectations. The sector, however, is not out of the woods with falling interest rates sure to take a chunk from their future earnings.

The textile sector also witnessed activity as the government announced incentives for the sector by imposing duty on the import of Indian yarn and also lowering the financing rates for capital expenditures. Nishat Mills rose 1.4% during the week, following the announcement.

Foreigners were again sellers at the bourse, offloading $2.6 million worth of net equity on the back of the $9.2 million net selling the previous week. Foreigners have now offloaded a net of $28 million worth of equity in the Pakistani market in October alone.



Average daily volumes fell 10.7% and stood at 161.7 million shares traded per day, while average daily values also fell 4.7% and were recorded at Rs8.19 billion per day. The Karachi Stock Exchange’s market capitalisation stood at Rs7.23 trillion ($69.3 billion) at the end of the week.

Published in The Express Tribune, October 24^th, 2015.

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