Daily Times

Bulls welcomed new fiscal year 2021 by recording an energetic comeback at the Pakistan Stock Exchange (PSX) after weeks of bearish trade and lack of rally as the KSE-100 index rebounded with a 3.3%, % jump from the previous week. KSE-100 added 1,112 points over the week to close the last session on Friday at 35,051.38 points, past 35,000 mark.

The market witnessed an unprecedented event of terrorism at Pakistan Stock Exchange building in I Karachi, but Investors defeated the terror to continue their bull run. Meanwhile, sentiments were lifted by a wide array of economic and political factors. On the economic front investors continue to push fresh rally on the back of policy rate cut by the State Bank of Pakistan to a 25-month low at 7%. Moreover, investors’ also cheered $1.3 billion commercial loan from China, to help Islamabad achieve the foreign exchange reserve target of around $12 billion by the end of fiscal year 2019-20. The move came after Pakistan’s foreign currency reserves maintained by SBP dropped to a six-month low at $9.96 billion in the week ended on June 18, 2020 mainly due to massive foreign debt repayments in recent weeks. Meanwhile the interest in risk stocks further surged after Finance Ministry’s decision to eliminate institutional investors from national saving schemes products from July 1st. The decision led companies and institutions to shift to risk equities. Investors’ sentiments were also lifted following receding political noise after National Assembly passed Finance Bill 2020-21 with a voice vote, after debates and amendments. The passage of bill struck an end to political uncertainty and clamor which dented sentiments last week.

On Friday, the benchmark KSE-100 Index started the day on a positive note and gained 127 points to touch an intraday high at 35,105.16. Kse-100 also touched intra day low at 34,918.52 points. The index closed at 34,978.18 points on Thursday. The total volume traded for the index reduced from 232.24 million shares in the previous session to 108.99 million shares, while the overall market volumes also declined from 383.08 million shares on Thursday to 175.76 million shares.

The volume chart was led by TRG Pakistan, followed by Jahangir Siddiqui & Co. Ltd and Hum Network Limited. The scrips exchanged 23.3 million, 12.75 million and 9.12 million shares, respectively.

Sectors that lifted the index included Pharmaceuticals with 34 points, Commercial Banks with 32 points, Fertilizer with 28 points, Technology & Communication with 16 points and Insurance with 7 points. Among the scrips, the most points added to the index was by Fauji Fertilizer Company Limited which contributed 24 points followed by The Searle Company Limited with 23 points, TRG Pakistan with 21 points, United Bank Limited with 21 points and Bank Al Falah Limited with 15 points.

The sectors which continued to weigh down the index included Cement with 33 points, Power Generation & Distribution with 13 points, Oil & Gas Marketing Companies with 13 points, Chemical with 2 points and Sugar & Allied Industries with 2 points. Among the scrips, the most points taken off the index was by Lucky Cement Limited which stripped the index of 16 points followed by The Hub Power Company Limited with 12 points, Oil & Gas Development Company Limited with 9 points, Muslim Commercial Bank with 8 points and Pakistan State Oil with 7 points.

Global markets: Global stock markets continue to show mix trend as investors tread cautiously over resurgence of covid-19.Investors arefearing global risk stocks could suffer a second meltdown in the event of another global spike in infections, the reintroduction of lockdown measures or an escalation in trade tensions.

Equity markets tail spinned into bear market territory in record time earlier this year as the virus and related lockdowns pounded sentiment, but they have broadly rallied from their March 23 low.

In Europe, stocks retreated on Friday as concern over a spike in U.S. coronavirus infections tempered the optimism arising from upbeat economic data out of the U.S., China. European stocks took a hit over grim economic outlook as in Germanany car sales plunged 40% in June to a 30-year low, according to German while, British factories are increasingly expecting to lay off workers, a survey from sector group Make U.K. showed Friday, with 46% of manufacturers expecting to make redundancies within the next six months, rising from 25% in May. Meanwhile IHS Markit services and composite PMI (purchasing managers’ index) readings Friday confirmed that the slump in business activity caused by the coronavirus pandemic eased in June as countries began to reopen their economies. However, the composite reading came in at 48.5 in June, a sharp rise from May’s 31.9still below 50 point mark, which separates expansion from contraction. London’s FTSE-100 lost 1.16% leading region’s losses, followed by CAC-40 in France which edged lower by 0.75%. German DAX also lost 0.38%.

In Asia, Stocks marked fresh rally after positive economic data raised optimism over the prospects of an economic recovery from the novel coronavirus pandemic. A private survey showed Friday that China’s services sector showed it growing at its fastest pace in over a decade in June, with the Caixin/Markit services Purchasing Manager’s Index (PMI) coming in at 58.4 for the month. That was the highest print since April 2010, and compared with May’s 55.0 reading.

The 50 level in PMI readings separates growth from contraction on a monthly basis. Chinese stocks led the gains, with the Shanghai composite closing 2.01% higher to around 3,152.81 while Hong Kong’s Hang Seng index edged higher by 0.99% higher, as of its final hour of trading. South Korea’s Kospi index advanced 0.8% to close at 2,152.41. The index recorded gains after Shares of SK Biopharmaceuticals skyrocketed 29.92% to see gains for a second day following its blockbuster IPO on Thursday. While, In Japan, the Nikkei 225 gained 0.72% to close at 22,306.48.

In U.S, Wall Street is expected to continue its rally following a better-than-expected U.S. jobs report as the economy tries to recover from the coronavirus pandemic. Investors have welcomed a dip in unemployment level as a blue print for a fast economic recover after government reported that a record 4.8 million jobs were created in June, in comparison to Economists’ expectations of creation of 2.9 million jobs. The unemployment rate fell to 11.1% from 13.3% in May against economists’ expectation 12.4%.

At Wall Street Thursday’s gains led to strong weekly performances for the major averages. The Dow rose 3.3% this week and the S&P 500 climbed 4% in the same time period.

It was the Dow and S&P 500?s biggest weekly gains since June 5. The tech heavy Nasdaq index posted its best weekly performance since May 8, jumping 4.6% this week. U.S. markets will be closed on Friday for the July Fourth holiday.