- Investors remain sidelined amid economic uncertainty
- Foreigners remained net Buyer of $30 mn in July
- KSE-100 maintained Critical Support level of 31,500 points
The benchmark KSE-100 remained volatile during the month of July-2018 and closed the month at 31,938 points with 5.8% Loss. Average traded Volumes fall to 61.3 million shares as compared to 98 million shares in the month of June.
During the month Index saw high of 34,896 points while it touched low of 31,485. Even the much-touted successful visit of Prime Minister to the US and meeting with President Trump and positive statements emanating from IMF officials over Government’s economic policies remained unsuccessful to improve market sentiment.
Uncertainty activities on the political front (no-confidence motion against Senate chairman) and disappointing financial results (Auto Sector, HBL) negatively impacted investor confidence.
Furthermore, higher cut-off yield in PIB/T-Bills auction 14.25%/14% led to a decline in Equity Investment attractiveness.
Foreign flows supporting market
Foreign buyers continued fresh investment in the market mainly in blue-chip stocks with Net Inflow of US$30 million during the month, with Cumulative net buy of US$78 million in 2019.
Mutual Funds remained net seller of $1.5 million while limited activity was witnessed from other segments of the market. Mutual Funds have remained massive seller in the market since the beginning of the year having sold cumulative $161 million in 2019.
Oil and Gas, Cement, Auto all declining
Oil and Gas sector, the heavyweight of the Index witnessed decline as mutual funds sold Blue Chip stocks of Oil and Gas Sector. Likewise, massive selling from the market was witnessed in Cement and Auto sector as Sales figure disappoints the market and cast doubts over future expectations.
Outlook and Technical Indicators
Benchmark KSE-100 is expected to stay volatile in the upcoming days as Result season keep investors nervous. Investors will remain cautious of the July-2019 inflation figure coming in this week reading as it would determine the future interest rate scenario.
In short-term, Technical chart indicates that the KSE-100 could find support near 31,800 level. A break below 31,800 could drag the index towards the critical support level of 31,500. KSE-100 Relative strength indicators (RSI) stands at 32.4.
Selective buying is expected from Institutional Investors as they give less weight to short-term performance and expectations that the market will rebound as economic indicators improve.