Stock Market Loses over 1000 Points Amid Tension with Iran

Muhammad Haris

Geo-political situation and tension at borders put immense pressure on the investors’ nerves which resulted in reduced volumes and index trimming by more than 1000 points during the outgoing week with pressure likely to remain in the coming week.

During the week local bourse remained depressed, amid political uncertainty and western border tension which caused panic in the market. Pakistan Stock Closed on a Negative Nod after Bleeding

In addition to this, SBP has confirmed that it has received inflows of $705 million on the successful completion of the first review by the IMF. The SBP reserves are anticipated to reach $8.9 billion next week. Moreover, UAE rolled over $2 billion for one more year, which was maturing in Jan’24.
During the week, the domestic currency closed at 280.36 against the USD, appreciating by 0.5 or 0.16% on the week on weekly basis.

Overall, the market concluded at 63,282 points, marking a decrease of 1,355 points or 2.1 percent on week on week basis.

Foreigner selling was witnessed during this week, clocking in at $1.19 million compared to a net buy of USD 1.88 million last week.

Major selling was witnessed in Banks ($2.6 million) and E&P’s ($1.4 million).

On the local front, buying was reported by Insurance ($11.5 million) followed by Companies ($1.8 million).

Average volumes arrived at 389 million shares, down by 30.5% on week on week basis while the average value traded settled at $49 million, down by 13.7% on week on week basis.

The KSE100 index is expected to remain in a thin range during the next week until geopolitical uncertainty is resolved, and all the stakeholders agree on the upcoming election, said Abdul Azeem, head of research at Spectrum Securities.

Moreover, the expected positive corporate results mainly bank and fertilizer sectors would support the market sentiments. “We suggest building position on a dip in the fundamentally strong shares”, said Abdul Azeem.

“We expect the KSE-100 index to be positive in the coming week”, said Tahir Abbas, head of research at Arif Habib, amid favorable expectations of quarterly results which will be closely monitored by the investors. Also, the Government will conduct an auction for Ijarah Sukuk on 23th Jan’24 at PSX, targeting an amount of Rs 100 billion.

Moreover, the scrips are trading at attractive valuations, and are expected to further boost positive sentiment at the index