KARACHI: Pakistan Stock Exchange witnessed selling pressure and the KSE-100 Index posted a negative return of 0.6 percent or 301 points during the month of July 2021 to close at 47,055 points.
A lack of interest and negative sentiment in the market was fueled by continued rise in cases of Covid-19 (rapid spread of delta variant) and infection ratio which increased from 2-3 percent in June 2021 to more than 7.0 percent in July 20’21, pressure on external account amid rising current account deficit on the back of massive increase in imports, depreciation of the PKR/USD parity, expected increase in inflationary readings amid surge in petroleum product prices and anticipation of Sindh government imposing stricter restrictions to curb the virus spread as Karachi witnessed a notable surge in its infection ratio to over 20 percent, an analyst at Arif Habib Limited said.
Moreover, uncertainty over how the geopolitical scenario pans out with regards to the US exit from Afghanistan, and Pakistan’s crucial role in this, also kept sentiment jittery, he added.
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Foreign investors also remained on the selling side and withdrew $28.595 million from Pakistan capital market during this month.
Other key highlights this month include inflation reading clocks in at 9.7 percent in June, FBR surpasses FY2020-21 tax collection target, Pakistan’s power production hits record high at 24,284MW, petrol price hiked by Rs5.40/litre, current account ends FY21 in deficit, dollar hits nine-month high at Rs 161.48 and foreign direct investment declines by 29 percent in FY21.
Trading activities also remained thin as average daily volumes on ready counter during the month nosedived and dropped by 49 percent on month-on-month basis amid Eid holidays and reasons aforementioned above. Likewise, value traded also followed the same trend and dropped by 38 percent on month-on-month basis.
Copyright Business Recorder, 2021
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