LAHORE: The Pakistan Stock Exchange (PSX) overcame three-week long losing streak, that cumulatively dragged index by 8.6 per cent, and turned green amid attractive valuation that enticed investors to make a fresh entry in the market. Benchmark index closed at 42,074 index level, gaining 451 points or 1.1 per cent WoW but shed 462.07 points from its close on Thursday.
Sentiments during the week remained weak except the single day buying spree where the KSE 100 index gained over 1000 points.
Foreign investors have also felt the heat and are expected to close their fourth consecutive weak as net sellers according to figures revealed by National Clearing Company of Pakistan (NCCPL) until May 24, 2018. Foreign investors were net sellers during the week amounting to $26.1 million against $20 million last week. On the other hand, amongst local investors, mutual funds were net sellers of $4.4 million whereas insurance companies were net buyer of $23.2 million.
Assessment of stocks performance during the week reflect commercial bank sector and fertilizer sector to be among gainers. While cements put up a mixed show.
Auto sector consistently underperformed as the government barred non-filers from buying new cars. This move is likely to hit auto industry sales. Toyota Indus Motors (INDU) lost around 18 per cent since the budget announcement, while Honda (HCAR) and Pak Suzuki (PSMC) lost ~15 per cent and 9 per cent respectively.
Moreover, Pakistan has taken specific actions to save the country from being included in the Grey List by the Financial Action Task Force (FATF). “Pakistan had been nominated by FATF for the Grey List during February 2018 Plenary meeting; however, official intimation is yet to be received from FATF,” Finance Minister Miftah Ismail informed the house in a written reply to the National Assembly.
In international markets, shares in leading Japanese automobile, machinery and finance companies took a dive on Thursday after the administration of US President Donald Trump threatened steep car tariffs and while American interest rates lost upward momentum.
Technically speaking, another day ended on a negative note amid thin participation. The index is now trading below all short-term EMAs and is now heading for a test of recent low (41,458.12) and support at 61.8 per cent retracement (41,330). Meanwhile, the KSE 100 index is at a risk of entering death cross (negative crossover of 50/200EMA) on a further decline.
