KARACHI: Pakistan equities continued to trade in a narrow range, fluctuating between a high and a low of 47,980 points and 47,047points, and ended the week at 47,490 level as investors remained under cautious mood and kept their portfolios under the limit and opted for profit-taking with every upward move in the market.
Meanwhile, the market showed clear signs of fast recovery as the index staged a rebound of 435 points on the week-on-week comparison, mainly on the back of earnings season speculation, positive news flow on the economic front, and disapproval of the federal government to enforce a complete lockdown in the country.
Additionally, the news of tamer inflation for July 2021 was reported at 8.4 percent compared to 9.3 during the previous year. Further in positive statistics 16 percent month on month decline in the trade deficit for July 2021, and expectations of a surge in forex reserves by $2.8 billion from revision in IMF’s SDR allocation lifted the market sentiments. However, the index continued to show resistance near the 48,000 level and eventually succumbed to profit-taking at the end of the week.
“Despite all the positive statistics on the economic front and provoking estimates from corporate sectors, the COVID-19 spread fear keeping cap to the market surge,” Khurram Schezad, CEO, Alpha Beta Core, an investment advisory institution said in an interview.
“We hope as the situation from the COVID-19 front eases down the market will perform to its full potential in coming weeks.”
Going forward, the analysts maintained a positive stance on market given the emerging improvements in the macro-economic fundamentals, accommodative monetary policy stance, and ongoing result season with solid earnings expectations for cyclical stocks. However, concerns related to inflation due to the expected hike in petroleum prices and the continued surge in coronavirus cases may hurt market sentiments in the short term.