KARACHI: The Pakistan Stock Exchange remained bearish after shedding 84 points to reach 44946 level till midday on Monday.
The stocks started new week on negative note after shedding 157 points to drop to 44873 level in early trading.
Last week, the devaluation of Pakistani rupee caught investors’ off guard during the week, helping sustain feeble bull-run. The benchmark KSE 100-index closed up 3.8 percent on week-on-week basis (WoW) at 45,030 points before the long weekend as a result of 5 percent depreciation of rupee, which at the end of the week stood at its all-time low of Rs115/US dollar.
Market participants, although taken by surprise over the timing, welcomed the move and bought stocks in key benefiting sectors such as (1) commercial banks (+6.1 percent WoW on higher expectations of rate hike in the upcoming MPS announcement), (2) E&Ps (+4.0 percent WoW due to dollar denominated revenues) and (3) IPPs (+2.0 percent WoW on hedged exposure vis-a-vis the greenback) etc.
Broadbased euphoria in these heavyweights also culminated into across the board buying in sectors such as (1) autos (+0.5 percent WoW as manufacturers raised prices to pass on increased dollar import costs), 2) fertilizers (+4.0 percent WoW on relatively less exposure to Pak rupee/US dollar parity) and (3) OMCs (+2.7 percent WoW on news of another cash injection to clear circular debt pile of Rs514biillion) and (4) cements (+3.4 percent WoW on price recovery in the north zone).
Market jumped 4 percent in a short week and helped index to close above 45k mark, gaining 1,667 points. This is the highest index gain in terms of percentage return after a lag of 10 weeks. Participation in blue chip stocks (banking and E&Ps) led traded value to grow by 43 percent while volumes went up by 10 percent.