After witnessing heavy losses in the last month owing to increased tensions on the geopolitical front, the Stock market posted a strong recovery during the previous week as tensions slightly eased. However, the recovery is termed as a dead cat bounce aftermarket observed a decrease of 45% from its peak of 53000.
Benchmark KSE-100 ended the week at 31,350 points, a weekly gain of 9%. The activity in the market also increased as an average daily volume for KSE-100 stood at 174.42 million shares.
Net selling of $4.9 million was witnessed by Foreigners (FIPI). While huge buying of $3.8 million was seen from Brokers.
Stock Market Outlook
The market is expected to focus on the August-2019 inflation figure expected in next week. While major financial results announcement from NBP, INDU, FCCL, and FATIMA are also expected next week.
The geopolitical situation still casts risk and any deterioration on that front will weigh bearish on the market.
Investor’s sentiment is likely to stay bearish as Pakistan is placed on enhanced monitoring mechanism by Asia Pacific Group (APG) of FATF. Furthermore, talks between FBR and Businessman remained inconclusive over conditionality of CNIC and fixed tax regime.
The Government debt stands at 82% of GDP which is expected to have dampening impact. Furthermore, signs of economic recession are visible as a drop in cement and tiles sales along with new car import policy in talks would put pressure on cyclical stocks.
All these factors are likely to cast bearish sentiments on the market despite positive news of an agreement between the US and Taliban on troop pullout time frame and implementation of steps by SECP to enhance liquidity at PSX.