PSX weekly review: KSE-100 inches upward in lacklustre week

• Concerns over currency depreciation, upcoming mini-budget hinder market from posting exorbitant gains.
• KSE-100 index gains 0.5%, closing the week at 44,118.39 points.
• Benchmark index closed two out of five sessions in the green.

KARACHI: The Pakistan Stock Exchange (PSX) experienced sombre trading during the outgoing week as a lack of positive triggers dimmed investor sentiments. Resultantly, the KSE-100 index gained 0.5% to close the week at 44,118.39 points.

Trading on Monday kicked off on a positive note as the benchmark KSE-100 index rose over 400 points in guarded trade as investors capitalised on the central bank’s liquidity injection amid upbeat large-scale manufacturing (LSM) numbers released last week.

However, the market failed to sustain the optimism and the bourse succumbed to selling pressure as widening current account deficit in November, which clocked in at $1.91 billion, weighed on the investors’ sentiments, shaking their confidence.

The benchmark index continued to extend losses on Wednesday as continuous depreciation of the Pakistani rupee against the local currency and anticipation of a Rs400 billion mini-budget kept the investors on the sidelines.

Fortunately, after receding for two successive days, the market reversed its trend on Thursday and edged up about 91 points in topsy-turvy trading as investors cheered confirmation from the finance ministry that the sixth review of the Extended Fund Facility will be presented to the International Monetary Fund's (IMF) executive board on January 12.

However, the benchmark index closed the week on a negative note as the optimistic approach faded away due to investors' concerns about higher inflation and dip in total liquid foreign exchange reserves held by the central bank mainly due to external debt repayment.

Other major developments during the week were: current account deficit clocked in at $1.9 billion for November, the central bank announced liquidity injection through open market operation for 63 days, the government unveiled the new Auto Policy (AIDEP 2021-26), and SBP foreign exchange reserves fell to $18.1 billion.

Meanwhile, foreign selling continued this week. Selling was witnessed in the oil and gas exploration sector.

During the week under review, average volumes clocked in at 215 million shares (down by 19% week-on-week), while average value traded settled at $45 million (down by 5% week-on-week).

Major gainers and losers of the week

Sector-wise positive contributions came from power (+4.1%), pharmaceutical (+3.5%), food (+2.2%), autos (+2.2%) and technology and communications (+1.8%). On the flip side, negative contributions came from chemical (-2.9%) and textile composites (-1.5%).