Bearish trend prevails

Pakistan Stock Exchange witnessed bearish trend during the outgoing week ended on March 1, 2019 due to selling mainly by local investors. BRIndex100 lost 75.74 points on week-on-week basis to close at 4,186.85 points. Average daily volumes stood at 148.280 million shares. BRIndex30 decreased by 592.09 points during this week to close at 21,547.73 points with average daily turnover of 105.667 million shares.
KSE-100 index declined by 477.11 points on week-on-week basis and closed at 39,539.02 points. Trading activities slightly improved as average daily volumes on ready counter increased by 51.9 percent to 160.05 million shares as compared to previous week's average of 105.34 million shares. Average daily trading value increased by 33.3 percent during this week to Rs 7.13 billion.
The foreign investors remained net sellers of shares worth $1.3 million during this week as compared to a net inflow of $3.5 million in the previous week. Total market capitalization increased by Rs 130 billion to Rs 8.084 trillion.
An analyst at AKD Securities said that the market movements during the week were largely reflective of the geo-political tensions following the border skirmishes between Pakistan and India. The KSE-100 index bottomed out during third intra-day session at 37,323.6 points, losing 6.7 percent mid-week as cross border tensions escalated and panic kicked in leading to an across the board sell-off. However, the market recovered 1,369 points on the same day as investors took positions on dips while the in-creasing possibility of de-escalation amid calls from international community brought back the confidence in the following days - resultantly the KSE-100 pared earlier losses, closing the week at 39,539 points, down 1.2 percent on week-on-week basis.
Major laggards during the week included ASTL (down 15.77 percent), EFOODS (down 8.21 percent), HASCOL (down 7.4 percent) and PIOC (down 7.0 percent). Stocks leading the volume board were BOP (92.9 million shares), KEL (45.9 million shares) PIBTL (28.9 million shares) and EPCL (26.9 million shares).
An analyst at JS Global Capital said that the market shed 477 points during the week to close at 39,539. Although the technical charts were hinting at a correction at above 40,000 levels, the sharp decline during the week was majorly attributable to disturbing news on the political front. The situation escalated between India and Pakistan after the Pulwama attack last week, and an Indian airplane was shot down in Pakistani territory by Pakistan armed forces. A war-like situation was emerging which created panic among market participants and led to bearish momentum for the majority of the week.
However, following televised statements by the Prime Minister of Pakistan and the promise of return of an Indian pilot, news flows suggested that the scenario had changed, which led to some recovery in the market in the latter part of the week. On a sector wise basis, Refinery (down 5.1 percent), Engineering (down 5.6 percent) and Cements (down 3.7 percent) were among the major losers during the week.