KARACHI: The stock market likely stay range bound during next week owing to political uncertainties after no-confidence motion against the prime minister.
Analysts at Arif Habib Limited expect the market to remain range bound in the upcoming week.
READ MORE: Pakistan stocks dip 200 points on political uncertainty
With Government and opposition seeking allies prior to the no-confidence motion against the prime minister, the market is expected to remain jittery.
On the international front, any de-escalation by Russia and successful negotiation with the West may push the commodity prices (especially oil and coal prices) down, which will improve sentiment of local bourse.
READ MORE: Pakistan stocks gain 810 points on sharp dip in oil prices
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 4.8x (2022) compared to Asia Pacific regional average of 13.2x while offering a dividend yield of around 9.2 per cent versus 2.4 per cent offered by the region.
The market commenced on a negative note on Monday (wiping-off 1,284 points DoD) as international oil prices touched a 14-year high (Brent rose to USD 139/bbl) since US and EU discussed banning Russian oil imports, raising concerns over the current account position.
READ MORE: Stocks gain 165 points on unchanged monetary policy
Moreover, submission of a no-confidence motion against Prime Minister Imran Khan by opposition parties in the National Assembly added to woes of the investors.
Amidst the political noise, SBP kept the policy rate unchanged at 9.75 per cent in its monetary policy meeting, which brought bulls back in the market.
READ MORE: KSE-100 index sheds 389 points in volatile trading
Later during the week, the international oil prices witnessed a hefty drop led by statement from UAE’s ambassador to USA urging OPEC to increase production, which cushioned the overall dip (adding back 810 points DoD to the index). The market settled at 43,653points, losing 898 points (down by 2.02 per cent) WoW.
Sector-wise negative contributions came from i) Banks (167 points), ii) Oil & Gas Exploration Companies (163 points), iii) Power Generation & Distribution (143 points), iv) Cement (113 points), and v) Oil & Gas Marketing (101 points).
Whereas, sectors which contributed positively were i) Technology & Communication (107 points), ii) Automobile Parts & Accessories (20 points) and iii) Chemical (15 points).
Scrip-wise negative contributors were HUBC (124 points), LUCK (122 points), PPL (75 points), OGDC (60 points) and PSO (59 points). Meanwhile, scrip-wise positive contribution came from SYS (148 points), NATF (23 points) and THALL (20 points).
Foreign selling continued this week, clocking-in at USD 3.13 million compared to a net sell of USD 0.97 million last week. Major selling was witnessed in Banks (USD 4.4 million) and Textiles (USD 0.4 million). On the local front, buying was reported by Companies (USD 5.4 million) followed by Other Organizations (USD 3.7 million). Average volumes clocked-in at 214 million shares (down by 0.7 per cent WoW) while average value traded settled at USD 38 million (down by 11 per cent WoW).
