KARACHI: The positive momentum from last week helped the market record gains during the first three trading days aided by news of US and Pakistan agreeing to resume bilateral talks; however, the bourse failed to sustain the rally as profit taking was witnessed on Thursday over news that the Lahore High Court has ordered the Punjab government to make the Model Town incident report public. There were also media reports circulating during the week that the Finance Minister has decided to step down from his position. This all coincided with strong technical resistance of the benchmark KSE-100 index at around 43,500, with the index finally closing at 42,750, going down by 0.1 percent week-on-week (WoW). The overall activity at the bourse improved as the average daily volumes and traded value picked-up to reasonable levels of 171 million shares/day or 9 percent WoW and $85 million/day or 3 percent WoW, respectively. Activity was focused in retail favorite stocks, which included World Call (WTL) with 73 million shares, TRG Pakistan (TRG) 62 million shares, Dost Steel (DSL) 58 million shares, Engro Polymer (EPCL) with 35 million shares and K-Electric (KEL) with 29 million shares. While Mutual Funds remained the major net seller with $4.5 million, the selling was absorbed by Insurance Companies with net buying of $ 4.2 million. Key buyers were Banks/DFIs with net buying of $2.6 million, while foreigners were also net buyers of $0.4 million during the week. On the economic front it was a mixed bag as positives of reduction in current account deficit to $550 million in August-2017 from $2,051 million in July 2017, improvement in Foreign Direct Investment (FDI) by 155 percent year-on-year (YoY) to $ 457 million in second month of FY18 and growth of 13 percent YoY in Large Scale Manufacturing (LSM) during July-2017 was offset by news of International Centre for Settlement of Investment Disputes (ICSID) awarding case in favor of a Turkish firm M/s Karkey Karadeniz Elektrik Uretim and imposing a fine of $800 million on Pakistan. An Elixir Research’s analyst said though the benchmark index held its ground lately the volumes had remained dull due to the absence of triggers. Risk-off sentiment is expected to continue in upcoming days due to fears over political risks related to different cases against senior politicians of the sitting government. However, in broader picture, external account imbalances would continue to be a chief concern with expectation of sharp depreciation in Pakistani Rupee US Dollar in spite of improvement in current account deficit during the month of August 2017. Published in Daily Times, September 24th 2017.