Equities under severe pressure

Pakistan Stock Exchange remained under severe pressure during the outgoing week due to heavy selling in almost all sectors. BRIndex100 lost 174.77 points on week-on-week basis to close at 4,182.30 points. Average daily volumes stood at 151.779 million shares. BRIndex30 declined by 1288.1 points to close at 21,480.36 points with average daily turnover of 115.010 million shares.

KSE-100 index plunged by 1,487.30 points on week-on-week basis and closed at 40,143.63 points. Trading activities remained low as average daily volumes decreased by 10.9 percent to 167.64 million shares as compared to previous week's average of 188.14 million shares. Average daily trading value declined by 1.4 percent to Rs 6.99 billion.

Total market capitalization declined by Rs 276 billion to stand at Rs7.575 trillion. "Rattled by higher than expected inflation prompting wider risk-off sentiments (as expectations of monetary easing get delayed) the KSE-100 index slipped 3.6 percent on week-on-week basis to close at 40,144 points," an analyst at AKD Securities said.

An analyst at JS Global Capital said that the market closed negative for the fourth week in a row. Such a correction was always on the cards, considering the rally of the preceding weeks, where the market had already climbed by 50 percent since mid of August 2019 to a peak closing of 43,218 points.

Activity at the bourse also slowed down as investors chose caution over adventurism considering the upcoming FATF and IMF reviews. Quite clearly, the most telling session of the week was on Monday, when the market lost 1,221 points (down 3 percent) in a single day, which was due to high inflation numbers (up 14.6 percent on year-on-year basis) disclosed at the weekend for the month of January 2020. Following that session, the market recovered the next day, only to experience declines in the remaining two sessions as chatters around the on-going IMF review dominated headlines.