KARACHI: Trading began on a sluggish note in the outgoing week as inflation touched 24.5 per cent for December, said Arif Habib Ltd.

The government announced that commercial markets would close by 8:30pm to save approximately Rs62 billion. Additionally, the trade deficit in the last month dropped 41pc to $2.86bn year-on-year but increased 2pc on a monthly basis. Similarly, foreign exchange reserves fell by $245 million to $5.57bn, lowest since April 2014, hurting sentiments on the bourse.

In addition, the rupee depreciated 0.31 per cent week-on-week against the dollar to close at 227.14.

Energy stocks remained in the limelight during the outgoing week, thanks to the potential resolution of the circular debt.

The stock market started to rally towards the end of the outgoing week as it appeared likely that the International Monetary Fund (IMF) and Pakistan would soon commence negotiations to revive the loan programme.

As a result, the index closed at 41,007 points after gaining 587 points or 1.45pc from a week ago.

Sector-wise, positive contributions came from fertiliser (336 points), exploration and production (246 points), technology (139 points), miscellaneous (133 points) and oil marketing (47 points).

Sectors that contributed negatively were cement (126 points), power (62 points), auto assembling (50 points) and textile composite (30 points).

Scrip-wise, positive contributors were Engro Corporation Ltd (191 points), Pakistan Petroleum Ltd (140 points), Pakistan Services Ltd (124 points), TRG Pakistan Ltd (79 points) and Pakistan Oilfields Ltd (74 points).

Meanwhile, negative contributions came from the Hub Power Company Ltd (44 points), Lucky Cement Ltd (40 points), Meezan Bank Ltd (37 points), Nestle Pakistan Ltd (28 points) and K-Electric Ltd (25 points).

Foreign buying was witnessed in the outgoing week as it clocked in at $0.3 million versus a net sale of $16.6m a week ago.

Major selling was witnessed in commercial banking ($0.5m) and “all other sectors” ($0.3m). On the local front, buying was reported by companies ($3.2m) and brokers ($0.9m). The average daily volume clocked in at 176m shares, down 17.9pc from a week ago. The average value traded settled at $23.3m, down 22.7pc from the preceding week.

According to AKD Securities, the stock market is expected to remain under pressure in the near future because of the weakness in the rupee against the dollar and the concerns about the country’s fiscal health.

Stocks will remain jittery amid uncertainty on the economic front, it said, noting that investors should stay cautious while building positions.

Published in Dawn, january 8th, 2023