With the index set to pause for the Eid break next week, stock investors have an opportunity to step back, reflect, and strategize. The recent tumultuous week has left market participants grappling with substantial losses, but analysts at Arif Habib Limited encourage reassessment of the situation, highlighting potential value-buying opportunities amid the downturn.
In the immediate term, analysts believe the ongoing result season will likely dictate the performance of several key scrips. The week’s selloff was largely unwarranted, driven by fragile market sentiment, which stock investors attribute to heightened regional tensions. India’s unilateral revocation of Kashmir’s special status not only reignited political rivalries between the two nuclear-armed South Asian nations but also stoked domestic geopolitical instability.
As regional peace appeared under strain, stock investors faced heightened uncertainty, translating to significant losses. The benchmark index closed the week at 29,429 points, shedding a staggering 2,237 points, or 7.1% on a week-on-week basis.
Sectoral losses were led by Commercial Banks, which contributed a negative 844 points, followed by Oil & Gas Exploration Companies (529 points), Power Generation & Distribution (221 points), Fertilizers (182 points), and Oil Marketing Companies (121 points). Scrip-specific declines came from UBL (216 points), OGDC (195 points), HBL (187 points), PPL (176 points), and HUBC (163 points).
Foreign stock investors pulled out funds, recording a net selling of USD 0.9 million compared to a net buy of USD 3.4 million the previous week. The heaviest foreign outflows were seen in Commercial Banks (USD 4.5 million) and Oil & Gas Marketing Companies (USD 0.2 million). However, on the domestic front, individuals and banks emerged as buyers, contributing USD 10.9 million and USD 3.5 million, respectively.
Average daily volumes increased by 26% WoW to 72 million shares, while the average value traded surged by 44% WoW to USD 19 million. While the Eid break offers stock investors a chance to recalibrate, the market’s trajectory post-holiday will hinge on geopolitical developments and result-driven performance in key sectors. For now, stock investors are advised to tread cautiously, leveraging opportunities amid the volatility.