The stock market remained highly volatile in the four trading sessions of the last week and closed at 35,975 points with a gain of 0.8% or 270 points.
The week commenced on a negative note because of profit-booking and a lack of clarity on creation of a market support fund, which remained in the limelight in the past two weeks. The resignation of Pakistan Stock Exchange (PSX) Managing Director and CEO Richard Morin also added to negative sentiments in the bourse.
However, investors' interest revived in the last two sessions as the Economic Coordination Committee (ECC) approved a Rs20-billion support fund.
The government approved utilisation of savings of pensioners and bank depositors for injection into the stock market aimed at giving a boost to wealthy brokers and ending volatility in the bourse. Investor sentiments and market volumes improved in anticipation of creation of the market support fund.
State-owned mutual fund National Investment Trust (NIT) will manage the fund and inject it probably into state-owned listed companies including Oil and Gas Development Company, Pakistan Petroleum Limited, Pakistan State Oil and many more.
Moreover, the rupee gained some strength against the greenback, which further aided the positive sentiments.
Furthermore, the government planned to withdraw the benefits available to the five zero-rated sectors, sparking protest from the relevant industry players. Unsurprisingly, the textile sector underperformed the benchmark KSE-100 index.
Investor participation shrank as average daily volumes in the outgoing week went down 8% to 165 million shares while the average daily traded value surged 22% to $48 million.
Positive contribution to the index was led by commercial banks (up 174 points), oil and gas marketing companies (120 points), automobile assemblers (53 points), oil and gas exploration companies (41 points) and tobacco firms (34 points).
However, sector-wise negative contribution came from fertiliser companies (down 93 points) and textile firms (61 points).
Stock-wise major gainers were UBL (up 67 points), Bank AL Habib (60 points), Lucky Cement (58 points) and PSO (44 points). On the other hand, negative contribution came from Fauji Fertiliser Company (66 points), HBL (65 points) and Nishat Mills (44 points).
Foreigners turned sellers during the last week as selling came in at $2.95 million compared to net buying of $0.02 million last week. Major selling was witnessed in exploration and production firms ($5.9 million) and fertiliser producers ($0.7 million).
On the domestic front, major selling was reported by banks/DFIs ($5.2 million), followed by broker proprietary trading ($3.4 million).
Major news of the last week included the Drug Regulatory Authority cutting prices of 78 medicines, Chinese vice president visiting Pakistan, ECC deciding to import 200 mmcfd of LNG at 20% lower cost from Qatar, shifting of China's$2-billion SAFE deposits to loan category, Ogra proposing hike of Rs8.53 per litre in petrol price, PM Imran approving increase in taxes on cigarettes, gas utilities cutting down UFG losses by around Rs1.95 billion, Unity Foods announcing to acquire Sunridge Foods and Nepra allowing increase of 55 paisa per unit in power tariff.
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