Morning Market Brief 17th Feb. 2021

The Benchmark KSE100 index have recovered aggressively from a strong horizontal supportive region during last two trading sessions and now its heading towards a resistant trend line which falls at 47,256pts for current trading session, it's expected that this trend line could cap current bullish sentiment. For current trading session it's expected that index would try to start the day with a positive momentum but later on it would face initial resistance between 46,960pts-47,100pts which would be followed by 47,256pts therefore its recommended to post trailing stop loss on existing long positions and start profit taking from them. While on flip side in case of reversal 46,600pts region would try to provide ground against intraday pressure while breakout below that region would call for 46,300pts and 46,000pts. Impact of previous week's bearish engulfing would be considered intact until index would not succeed in closing above 46,900pts on weekly chart, meanwhile resistant regions would got strength from weekly double top between 47,250pts-47,350pts region therefore it's recommended to stay cautious until index would not succeed in closing above 47,500pts on daily chart.

U.S. Treasury yields hit one-year highs on Wednesday, lending support to the dollar but pressuring lofty valuations for stocks, as investors reckoned that a stimulus-fuelled global recovery will eventually bring rising inflation. Benchmark ten-year U.S. Treasury yields rose as far as 1.3330% in Asia, the highest since February 2020, although they later eased back to 1.2989%. The gap over two-year yields also opened to its widest in nearly three years, as traders figure that short-term monetary policy will stay accommodative, even as the world bounces back from the pandemic. Japan’s Nikkei fell 0.7% and S&P 500 futures slipped 0.3% after the index posted a small fall overnight. Overnight on Wall Street, the Dow Jones was helped to a record closing high by gains from banks, which benefit from higher yields, while the S&P 500 fell 0.06% and the Nasdaq dropped 0.3%. U.S. crude futures slipped 0.6% to $59.71 a barrel on Wednesday after poking above $60 on Tuesday, while Brent crude futures were also down 0.6% at $62.95.Read More...

The production of cars in the country witnessed an increase of 4.87 percent during the first seven months of current financial year 2020-21 as compared to corresponding period of last year. During the July-January (2020-21), as many as 75,867 cars were manufactured against the production of 72,337 units, showing growth of 4.87 percent, according to Pakistan Automobile Manufacturing Association (PAMA). The production of Honda cars went up by 66.10 percent from 8,232 units to 13,674 units during the months under review whereas the production of Suzuki Swift also rose by 21.86 percent from 997 units to 1,215 units. However, the production of Toyota Corolla declined from 15,256 units to 9,950 units, showing decrease of 34.77 percent, it added.Read More...

In pursuit of its agenda to promote ease of doing business and digitalization, the Securities and Exchange Commission of Pakistan (SECP) has launched a portal for expeditious bank account opening of newly registered companies. The online portal provides banks real time access to statutory records of companies, thus enabling them to open corporate accounts without seeking physically certified copies of statutory documents. Through this portal, the banks can access and verify company information directly from SECP’s records. The online availability of statutory records will reduce the turn-around-time for opening of corporate bank account or for availing other banking services. On the other hand, it will facilitate banks in carrying out due diligence of their corporate customers, for account opening and other services.Read More...

In order to restore the declining output of cotton as well as encouraging the growers to bring maximum area under crop production, the government was working on a scheme of incentives for the provision of all major inputs on subsidised rates during current Kharif Season. “Under the subsidy scheme, government would provide over Rs 2 billion subsidy to cotton growers across the crop sowing areas in the country for ensuring easy credit availability for purchasing inputs including certified seeds, fertilizers and pesticides during coming season”, Cotton Commissioner in the Ministry of National Food Security and Research Dr Khalid Abdullah said.Read More...

The International Monetary Fund (IMF) and Pakistan on Tuesday reached a staff-level agreement over reforms that will lead to the release of around $500 million in funds, the IMF and the country's finance ministry said. The package strikes an appropriate balance between supporting the economy, ensuring debt sustainability and advancing structural reform, the fund said in a statement. "Pending approval of the Executive Board, the reviews' completion would release around US$500 million," the IMF said. Finance Minister Dr Abdul Hafeez Shaikh also confirmed the agreement on Twitter, saying that "overcoming the challenges created by the pandemic has required concerted effort".Read More...