Daily Times

Pakistan Stock Exchange (PSX) continued to lose its ground to mounting fears of a complete lockdown, spurred by second wave of Covid-19, as panic ripped through market sentiments. On Monday, the benchmark kse-100 breached the support barrier of 40,000, and closed at 39,632.52 index level after losing 554.66 points.

The market is witnessing a long dry spell of volumes, as equity investors continue to exit the market. During the session the index tumbled nearly 900 points to mark as investors resorted to selling pressure, following Prime Minister Imran Khan’s warning of complete lockdown if the opposition did not desist from holding public gatherings at a time when the country was reeling under the impact of Covid-19.

Moreover, investors furthered panicked after news sources revealed that the Talks between Pakistan and the IMF to restart a $6b loan programme have stalled over Prime Minister Imran Khan’s refusal to introduce unpopular measures. Formal discussions to release a tranche of funding have been pushed back over concerns from Islamabad that instituting the reforms tied to the loan would provoke a backlash from the hard-hit middle class. An IMF team that was expected to visit Islamabad in October for further talks, as both sides remained at loggerheads on raising electricity tariffs, higher tax collection targets and increasing the repo rate, which was lowered to 7 percent in June from 13.25 percent earlier in the year.

However, the index pared earlier losses during the session, after market welcomed the much hyped State Bank of Pakistan (SBP) policy rate announcement. Pakistan’s central bank announced on Monday that the current interest rate at 7% would remain unchanged and that it expected inflation for fiscal year 2021 (FY21) to fall within the previously announced range of 7-9%.

On Monday, the volume at Kse-100 index increases from 125.3 million shares recorded in the previous session to 117.94 million shares, while the overall market volumes were recorded at around 195.47 million shares, increasing from the previous session’s volumes of 189.86 million shares.

The volume chart was led by Hascol Petroleum Limited followed by Unity Foods Limited and TRG Pakistan Limited. The scrips exchanged 15.42 million, 15.31 million and 13.32 million shares, respectively.

Sectors that dented the index were Commercial Banks with 121 points, Cement with 65 points, Oil & Gas Marketing Companies with 64 points, Technology & Communication with 42 points and Fertilizer with 41 points. Among the scrips, most points taken off the index was by Habib Bank Limited which stripped the index of 30 points followed by Pakistan State Oil with 26 points, TRG Pakistan Limited with 26 points, Meezan Bank Limited with 17 points and Muslim Commercial Bank with 16 points.

However, the scrips which continued to resist the pressure on the index were COLG which contributed 6 points followed by Pakistan Oilfields Limited with 5 points, Abbott Laboratories (Pakistan) Limited with 3 points, NESTLE with 3 points and Habib Metropolitan Bank Limited with 3 points.

Global markets: Covid-19 vaccine hopes lifts stocks

Global stocks advanced on Monday as market hopes mount that effective coronavirus vaccines will start to be rolled out soon. Hopes are raised that several coronavirus vaccines, found to be highly effective in late-stage clinical trials, could start to be rolled out in the U.S. in December. Pfizer and BioNTech on Friday applied for an emergency use authorization from the U.S. Food and Drug Administration for their coronavirus vaccine. Meanwhile, British pharmaceutical giant AstraZeneca on Monday said an interim analysis of clinical trials showed its coronavirus vaccine has an average efficacy of 70% in protecting against the virus.

In Asia, Investors continued to follow developments around Covid-19 vaccine. Among the regional markets, South Korea’s Kospi led gains among the region’s major markets as it gained 1.92% to close at 2,602.59, with shares of industry heavyweight Samsung Electronics up 4.33%.Chinese stocks also advanced during the day and edged higher on the day lifting Shanghai composite by 1.09% to about 3,414.4.Hong Kong’s Hang Seng index also closed 0.13% higher at 26,486.20. Meanwhile, markets in Japan were closed on Monday for a holiday.

European stocks also market a strong rally on Monday on Vaccine hopes. The pan-European Stoxx 600 hovered 0.1% above the flatline by early afternoon, oil and gas stocks bouncing 2.2% to lead gains. Among the regional markets, Germany’s DAX index led the gains, and advanced 0.45% followed by CAC-40 in France and Uk’s FTSE-100.

Vaccine hopes also lifted sentiments at Wall Street as during the early trading hours, 30-stock Dow Jones Industrial Average and S&P 500 rose 0.6% and 0.3% respectively. The markets responded to AstraZeneca and the University of Oxford said their coronavirus vaccine was up to 90% effective, becoming the third inoculation this month that was revealed to be effective in trial data. The tech stocks, meanwhile, were under pressure. Facebook and Apple fell more than 1% each. Netflix traded lower by 0.9%. Microsoft and Alphabet dipped slightly. Despite the pressure on the tech stocks, tech heavy Nasdaq Composite traded flat.