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Jittery week for stock investors

KARACHI: The KSE-100 index’s 10-week winning streak was broken in the outgoing week when the index fell 407.94 points (0.82 per cent) to close at 49,556 points.

The stock market remained volatile throughout the week, on the back of news flow and the corporate earnings announcements. Investors remained jittery over reports of action by SECP against brokers who were warned recently over compliance issues primarily related to financing.

PSX also succumbed to selling pressure early in the week as the US imposed travel bans on seven Muslim nations with hints of extending it to Pakistan.

However, the index staged a mid-week recovery amid news of ailment of one of the judges hearing the Panama Papers case, which ironically offered comfort to the investors as the uncertainty of the outcome of the case, dissipated for the time being.
With a steep decline which was later arrested by some support being provided by big sectors on the back of positive news,” said analysts at BIPL Securities.

The bearish trend of the stock market was in line with regional stock markets coupled with tightening compliance of regulator, commented analysts at Spectrum Securities. Market participants preferred cautious approach as average trading volume during the week declined by 36pc over the earlier week to 170m shares, while average traded value declined by 20pc.

Dealers at BMA Capital Management argued that there was a shift towards blue-chip stocks as investors looked for value in the face of higher volatility. Key performers during the week were steel, oil and gas and textile sectors, while major laggards were telecom, insurance and banking.

Volume leaders included: KEL 245.9m shares, TRG 111.6m shares, DSL 110.1m shares, LOTCHEM 95.7m shares and ASL 77.8m shares.

“Pharmaceuticals, refinery, cement and commercial banks declined by 2-5.5pc, while oil and gas exploration and chemical supported the broader index during the week as they were up 1-2pc,” observed dealers at Topline Securities.

Foreigner remained net sellers of $15.3m worth stocks during the week against outflow of $13.7m the previous week. The cumulative CYTD outflow now stands at $124.2m. Major foreign selling was seen in commercial banks and cements whereas buying was seen in fertiliser sector. NBFCs, organisations and mutual funds absorbed most of the foreign selling with a net cumulative buying of $20.9m.

OUTLOOK: Market gurus reckoned that the KSE-100 index could remain range-bound next week where investors’ sentiments would be driven by the corporate results announcements of big companies and of those that are more briskly traded on the exchange.

The news flow on Panama Papers case hearings, if it resumes in the coming week could also set the direction for the market.

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