Foreign selling clocked in at $10.5m compared to net sale of $1.7m the earlier week. Outflow was witnessed in cement worth $6.1m and commercial banks $3.8m. On the domestic front, major buying was reported by insurance amounting to $9.1m and companies $7.0m.
Sector-wise, negative contributions came from oil and gas exploration, lower by 267 points on declining international oil prices; commercial banks 180 points following the Monetary Policy Committee’s decision to keep rates unchanged in the last decision; power generation and distribution 81 points due to lack of clarity on settlement of outstanding dues. Cement lost 70 points on scare over the Competition Commission of Pakistan (CCP) probe over the hike in price while technology and communication was down 61 points.
On the positive side, textile composite gained 11 points on continuation of subsidised tariffs and sector scaling back to pre-coronavirus level of full capacity. Scrip-wise negative contributions were led by Oil and Gas Development Company, falling by 118 points, Pakistan Petroleum 94 points, United Bank 75 points, Hub Power 73 points and TRG 52 points.
With regards to the economy, current account recorded a surplus in August as well, taking 2MFY21 balance to a positive $805m, as against $1,214mn deficit in corresponding period of last year. Moreover, the heavy loadshedding impacted industrial units which were already nursing the wounds of damages caused by rains and fresh floods.
The government cautioned of massive gas deficit in winter as supply halts from some fields. The CCP raids on premises of All Pakistan Cement Manufacturers’ Association in a search operation and its impact on production and pricing was being observed. Rs20 billion was also raised through auction of market treasury bills with the cut-off yields of 7.13pc, 7.18pc and 7.31pc on three-, six- and 12-month papers, respectively.
Going forward, pundits expect the market to ease off profit taking as selling pressure due to the rollover week subsides. The global markets are erratic as European exchanges fear the second Covid-19 wave in winter.
The pandemic active cases continue to decline in Pakistan as recoveries are quicker and new cases remaining low, yet the impact of the movement of international markets on the minds of local investors cannot be totally ignored. The significant event in the upcoming week would the release of inflation data that would be a strong indicator which would mirror the state of the economy.