Daily Times

Pakistan Stock Exchange (PSX) continued to lose ground to mounting uncertainty due to Covid-19 resurgence, as benchmark Kse-100 lost 353.52 points by the closing bell, on the last trading day of the week to close at 40,187.18 index level.

On Friday the market attempted to resist the pressure during the first trading session of the day and remained flat however, the index succumbed to selling pressure in the second trading session and closed in the negative territory. The market sentiments has been dampening by mounting uncertainty, amid escalating number of Covid-19 cases in the country which raise fears of jamming nascent economic activity.

Moreover, absence of fresh economic triggers and deprecation of Pakistan Rupee continued to scare away equity investors from the market. During the week the rupee snapped almost two-month of its winning streak, as an uptick in the dollar demand for import payments weighed on the domestic currency. Pakistani currency has sharply depreciated by nearly Rs2, or over 1% in the past three days, to Rs158.85 against the US dollar in the inter-bank market. The currency bottomed out at just over Rs158 earlier this week as it had appreciated 6% from an all-time low of Rs168.43 (hit on August 26). Moreover, upcoming International Monetary Fund (IMF) review to resume the stalled Extended Fund Facility (EFF) has led to panic-buying by importers and hedging their imports. Moreover, some banks squared their short positions which put further pressure on the rupee, risking the local currency to further depreciate against the U.S Dollars.

Meanwhile, investors also geared for the upcoming monetary policy announcement by the state bank of Pakistan (SBP) due next week, and the roll over week. Therefore, during the session the investors offloaded equities to steer clear of any uncertainty which resulted in selling pressure, primarily in banking and cement stocks.

On Friday, the volume at Kse-100 index increases from 110.82 million shares recorded in the previous session to 125.38 million shares, while the overall market volumes were recorded at around 189.86 million shares, increasing from the previous session’s volumes of 188.6 million shares.

The volume chart was led by Unity Foods Limited followed by TRG Pakistan Limited and Maple Leaf Cement Factory Limited. The scrips exchanged 39.72 million, 14.17 million and 10.12 million shares, respectively.

Sectors that dented the index were Commercial Banks with 91 points, Cement with 63 points, Investment Banks with 52 points, Technology & Communication with 38 points and Oil & Gas Marketing Companies with 30 points. Among the scrips, most points taken off the index was by Dawood Hercules Corporation Limited which stripped the index of 51 points followed by United Bank Limited with 29 points, Lucky Cement Limited with 26 points, TRG Pakistan Limited with 23 points and Bank AL Falah Limited with 18 points.

However, the sectors which continued to resist the pressure on the index were Vanaspati & Allied Industries with 4 points, Tobacco with 4 points, Insurance with 4 points, Textile Composite with 2 points and Glass & Ceramics with 1 point. Among the scrips, most points added to the index was by Interloop Limited which contributed 7 points followed by Millat Tractors Limited with 5 points, Unity Foods Limited with 4 points, Nishat Mills Limited with 4 points and Philip Morris (Pakistan) Limited with 4 points.

Global markets: Virus fears weighs down investor sentiments

Global stocks traded mixed on Friday as investors’ fears mount over the possibility of global lockdown which threatens to halt newly revived economic activity. Amid resurgence of Covid-19, authorities are around the world are moving to reinstitute some of the stay-at-home orders, curfews and public safety measures, including shutting down nonessential businesses in a handful of cities. There are growing worries that if the infection spread is not contained, widespread lockdowns could be reinstated.

In Asia, Investors remained cautious despite vaccine hopes, as coronavirus cases continued to surge. Among the regional markets, Chinese stocks led the gains which lifted Shanghai composite by 0.44% to 3,377.73, followed by Hong Kong’s Hang Seng index which gained 0.36%. South Korea’s Kospi index also advanced 0.24% to close at 2,553.50 level.

However, bumping the trend Japans Nikkei 225 index receded 0.42% to end at 25,527.37. Investors digested fresh economic data, which showed that core consumer prices fell in October at their fastest pace annually in nearly a decade, raising deflation fears in an economy that is still grappling with the pandemic. The fresh inflation data preceded manufacturing data, which also revealed that the country’s factory output has also declined November.

European stocks however, shed the virus fears and instead welcomed U.S. Treasury decision to spike pandemic relief programs. The news of fresh stimulus plan lifted pan-European Stoxx 600 by 0.5% during afternoon deals in Europe, with oil and gas stocks also climbed 1.3% to lead gains as almost all sectors and major bourses entered positive territory. Major regional markets including Germany’s DAX, CAc-40 in France and UK’s FTSE-100 gained a fraction during the session.

In U.S, Wall Street continued to weigh in mounting fears fast spreading Covid-19 while investors also speculate flash central-bank funding for a key emergency programs, casting doubt on a swift economic recovery. On Thursday, Treasury Secretary Steven Mnuchin announced plans to allow several of the Federal Reserve’s emergency lending programs to expire on Dec. 31, reducing the central bank’s ability to shore up the financial system.