Upward trajectory

Pakistan stocks ended higher for the second consecutive week mainly because of what analysts said investors'' interest in banking and oil scrips. During the short week, that ended on Thursday, February 4, due to Kashmir Day, the benchmark KSE-100 index surged 3.8 percent to 32,479 points.
"Uptick was seen at local bourse in the outgoing week as investors gained interest in index-heavy banking and oil sector stocks," said researchers at brokerage house Topline.
Arif Habib analysts said during the week, the PSX remained immune to the downturns in some international markets on the back of weak US data leading to a dip in the US dollar.
"Meanwhile, the injection of funds by Chinese government to boost its economy before holidays and a rebound in oil prices supported positive trajectory of the local bourse," they viewed.
Daily trading turnover average 24 percent on 144 million shares worth Rs 8.5 billion. The value of stocks traded appreciated by 22 percent.
The week under review saw a bullish trend in banking, financial services and pharmaceutical/biotech sectors which, respectively, witnessed 7.2, 4.8 and 4.6 percent growth. The losers included beverages, tobacco and forestry sector, downing 7.8, 7.4 and 0.3 percent.
Foreign investment ended up in red with offshore investors offloading portfolios worth $2.2 million, on net basis. Investors bought $6.0 million cement stocks while the banks and oil and gas exploration sectors braved net selling of $7.1 million and $4.8 million.
Arif Habib analysts said rally at the benchmark equity gauge was led by banks like largely because of the State Bank keeping discount rate intact at 6.0 percent in its latest monetary policy statement.
This, they said, coupled with the anticipation of robust corporate results. "Some scrips (like PSO) attracted investors'' interest based on their positive outlook," they said.
In contrast, they said, unpredictability in crude prices continued to cause E&P scrips to change hands in haste.
Other highlights of the week were cotton output dipping 33.4 percent to 9.6 million bales during this season up until February 1st, IMF clearing the release of $500 million under 11th tranche of the EFF program, January inflation ticking up to 3.3 percent, tax amnesty scheme getting presidential sanction, and domestic debt swelling 12 percent to Rs 12.87 trillion.
"Our outlook on the market is stable based on improving economic scenario, chained with the announcements of corporate results to provide impetus to the local bourse in the coming week," said the AHL analysts.
However, they said, foreign selling remained a downward risk to the pace of the market.