Daily Times

KARACHI: Turmoil in the global equity and commodity markets dampened the investors’ sentiment at the Pakistan Stock Exchange (PSX) during the outgoing week as

the KSE100 index declined by 1.1 percent or 492 points week-on-week (WoW) to close at 43,808 points.

The local equities plunged after US stocks fell the most in more than six years, as the benchmark KSE-100 index declined by over 800 points or 2 percent during the early trades on Tuesday. The market recovered somewhat, however it failed to break the overall bearish trend with foreigners turning in net selling of $ 8.5 million during the week. The local mutual funds were also net sellers of $ 5.0 million.

The Stoxx Europe 600 Index headed for its worst week since 2016, erasing a year’s gains while China’s benchmark fell the most in almost two years. By the time of writing this note, MSCI World Index is already set for its biggest weekly drop since 2011. The driving force behind this turmoil has been the declines in US markets, which reacted to the sharp rise in market interest rates. The S&P 500 has already erased its gain for the year, closed at a two-month low and is on track for its worst week since 2011. The Dow plunged more than 1,000 points for the second time in four days. Finally, over USD5trn has been wiped from global stocks since January’s peaks

In the PSX, Oil & Gas Exploration and Cement sectors contributed 162 and 196 points to the overall decline in the benchmark index. In percentage terms, cement sector declined by 4.2 percent and Oil & Gas Exploration declined by 2.2 percent tracking declines in global crude oil. The key outperformer during the week was Real Estate & Investment Trust sector (up 6.9%) as investors accumulated positions in Dolmen City REIT (DCR).

Foreigners remained major net sellers as they offloaded shares worth 8.5 million during the week whereas individuals were the major net buyers with $8.7 million. Elixir Research Department said the market is in consolidation phase after rallying 8.8 percent in January, driven by unprecedented foreign flows. However the sentiments next will likely be driven by trends in the international markets, as global investors absorb the structural shift and reversal in Monetary Easing across US and UK.

Published in Daily Times, February  11^th 2018.