Weekly Review: range bound trading likely

Weekly Review: range bound trading likely

KARACHI: The stock market likely to stay range bound during next week due to geopolitical situation after Russia-Ukraine tensions.

Analysts at Arif Habib Limited said that any de-escalation in Russia-Ukraine tensions could propel a rebound in global markets.

Until geopolitical dust settles, we expect range bound activity to prevail in the market.

READ MORE: Pakistan Stocks gain 154 points, follow global markets

The market participants also remain wary of high commodity prices so any indication of oil prices cooling down would also the aid the sentiment in the local bourse.

Keeping in view the ongoing result season, certain sectors and scrips are expected to stay under limelight.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 4.9x (2022) compared to Asia Pacific regional average of 13.5x while offering a dividend yield of 8.9 per cent versus 2.4 per cent offered by the region.

READ MORE: Pakistan stocks shed 1,302 points on Russia-Ukraine war

In the week commencing February 21, 2022, KSE-100 index remained in the red zone slashing 313 points, mainly owing to investor concern over geopolitical tensions between Russia and Ukraine, which tossed global crude oil prices to above USD 100/bbl.

Other concerns such as the FATF’s decision together with selling spree during the ongoing roll over week, also kept the index under pressure.

Moreover, announcement of incentives worth Rs 1 billion for the IT sector triggered buying mid-week, albeit, the positive momentum could not sustain for long as the market plummeted over the noise of Russia’s military attack on Ukraine.

READ MORE: Equity market gains 121 points in volatile trading

The market closed at 43,984 points, shedding 1,692points (down by 3.7 per cent) WoW.

Sector-wise negative contributions came from i) Technology & Communication (342 points), ii) Commercial Banks (243 points), iii) Cement (222 points), iv) Oil & Gas Exploration Companies (146 points), and v) Fertilizer (127 points).

Whereas, sectors which contributed positively were i) Automobile Assembler (18 points), ii) Real Estate Investment Trust (10 points) and iii) Tobacco (9 points). Scrip-wise negative contributors were TRG (201 points), LUCK (133 points), SYS (109 points), HBL (100 points) and PPL (76 points). Meanwhile, scrip-wise positive contribution came from UBL (46 points), MTL (23 points) and HMB (16 points).

READ MORE: Stocks plunge 351 points on high international oil prices

Foreign selling continued this week, clocking-in at USD 3.2 million compared to a net sell of USD 1.97 million last week. Major selling was witnessed in Cement (USD 2.1 million) and Technology (USD 1.7 million).

On the local front, buying was reported by Banks (USD 0.6 million) followed by All other sectors (USD 0.5 million). Average volumes clocked-in at 229 million shares (up by 20 per cent WoW) while average value traded settled at USD 38 million (up by 29 per cent WoW).

READ MORE: Equities shed 313 points in lackluster trading