Morning Market Brief 11th May. 2020

The Benchmark KSE100 index have closed below supportive trend line of its rising wedge during last trading session and it's expected that now it would face strong resistance from same trend line in case of reversal, meanwhile it would be capped by a strong horizontal resistant region at 33,500pts. It's expected that index would continue its bearish momentum during current trading session and pressure would start piling up in case index would succeed in closing below 33,000pts. Index have succeeded in avoiding a weekly bearish engulfing pattern but a dark cloud have been formatted on weekly chart which would try to push index downward during this week. Daily closing below 33,000pts would call for 32,100pts and then 30,000pts in case of breakout below that region.

While in case of reversal index would face strong resistances at 33,500pts and 33,860pts on intraday basis and breakout above these regions would call for 34,200 & 34,500pts in coming days. Index would remain bearish until it would not succeed in closing above 35,200pts.

Asian shares followed Wall Street higher on Monday as investors looked ahead to more countries restarting their economies, even as some reported an unwelcome pick up in new coronavirus cases. South Korea warned of a second wave of the new coronavirus as infections rebounded to a one-month high, while new infections accelerated in Germany. Yet millions of French people are set to cautiously emerge from one of Europe’s strictest lockdowns on Monday, as countries across Europe ease restrictions. Investors seemed determined to stay optimistic and MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS firmed 1.1%. Japan's Nikkei .N225 added 1.6% and Chinese blue chips .CSI300 0.7%. E-Mini futures for the S&P 500 ESc1 opened soft but bounced as the morning wore on and was last up 0.5%.Read More...

The Pak­istan Young Pharmacist As­­sociation (PYPA) has written a letter to Special Assis­tant to the Prime Minister on Accountabi-lity Shahzad Akbar urging him to look into the import of over 450 medicines from India despite a ban. They said the federal cabinet had been briefed that there was a shortage of medicines for cancer but a term “Therapeutic Goods” was included in the summary to allow all kinds of medicines, vitamins, syringes and even mustard oil. Earlier, Pakistan Muslim League-N (PML-N) president Shahbaz Sharif deman­ded investigation into the medicine scandal through a parliamentary committee.Read More...

In a risky move, the petroleum ministry is seeking purchase of oil at $8-15 per barrel higher than the current low price for hedging of about 20 per cent of its total oil imports and pass on the cost of this higher rate to consumers. In a summary moved to the Economic Coordination Commit-tee (ECC) of the cabinet, the petroleum ministry has advocated that the proposal would be hedging some portion of exposure to Pakistan for import of petroleum products directly or indirectly linked to crude prices. This includes crude oil, motor gasoline, high speed diesel as well as LNG. The proposal has been finalised in consultation with the Standard Chartered Bank, Citibank, Habib Bank and JP Morgan.Read More...

The country’s trade deficit witnessed significant reduction in first three quarters of current financial year and declined by 25.68 per cent as compared to the corresponding period of last year. During the period under review country’s exports registered about 3.92 per cent decrease, whereas imports witnessed sharp decline of 16.50 per cent, according the foreign trade statistics of the Pakistan Bureau of Statistics (PBS). During the period from July-March (2019-2020), the exports witnessed decrease of 3.92 per cent and reached to $18.408 billion against the exports of $19.160 billion of the same period of last year, it added. Meanwhile, country’s imports witnessed significant decrease of 16.50 per cent and went down from $45.393 billion in first three quarters of last financial year to $37.905 billion of same period of current financial year, it said.Read More...

The Federal Board of Revenue (FBR) has drafted tax proposals for Budget 2020-21 mainly focusing on “simplification of laws and removing tax anomalies,” Dawn has learnt from knowledgeable sources. Unconfirmed reports are that the government is likely to announce a ‘tax-free budget’, an official in the FBR told Dawn, adding a final decision will be taken after consulting with the International Monetary Fund (IMF) after Eidul Fitr. It will depend on the IMF whether it considers Pakistan’s proposal to lower tax target for TY21. The Fund had proposed a tax target of Rs5.1 trillion for the next year, which is higher by 30pc from the FY20’s proposed collection.Read More...