Morning Market Brief 1st Feb. 2021

The Benchmark KSE100 index have faced rejection from a strong resistant trend line during last trading session and it can be said that index have faced rejection from a daily triple top. While on short to mid-term basis it can be said that index is facing major resistances at its correction levels of its last bearish rally. Meanwhile daily and hourly momentum indicators have change their direction towards bearish side therefore it's recommended to stay cautious and start profit taking from existing long positions. For current trading session it's expected that index would face some kind of serious pressure because index have succeeded in sliding below its major supportive trend line on both daily and hourly charts. It's expected that index would face initial resistance at 46,650pts where a strong resistant line would try to cap bullish sentiment while in case of bullish breakout above this region index would face rejection from 46,825pts where its being capped by an ascending trend line. While on flip side index would try to establish ground above 46,000pts but breakout below that region would call for 45,500pts in coming days. Daily MACD have turned its direction towards bearish side which is a negative indication therefore selling on strength could be beneficial during current trading session.

Asian shares tried to rally on Monday as Wall Street continued to struggle with doubts about vaccine rollouts and economic recovery, while silver surged as newly empowered retail investors turned speculative eyes to precious metals. MSCI’s broadest index of Asia-Pacific shares outside Japan recouped early losses to rise 0.7%, bouncing after four straight sessions of losses. Japan’s Nikkei added 0.8%, after shedding almost 2% on Friday, while Chinese blue chips gained 0.5% as the country’s central bank injected more cash into money markets. Wall Street indexes pared their losses but futures for the S&P 500 were still off 0.3%, while NASDAQ futures fell 0.4%. Dealers were also warily awaiting new developments in the headline-grabbing battle between retail investors and funds that specialise in shorting stocks. U.S. hedge funds bought and sold the most stock in more than 10 years amid wild swings in GameStop Corp, according to an analysis by Goldman Sachs Inc. Talk was that silver was the new target for the retail crowd as the metal jumped 5% to a six-month high.Read More...

The country’s primary balance remained in surplus of Rs216 billion, that is 0.5 percent of GDP, during the first five months of the current fiscal year (July-November FY2021) as against the surplus of 0.3 percent of GDP or Rs117 billion last year. However, the fiscal deficit during the period under review was recorded at 1.8 percent of GDP against the deficit of 1.6 percent of GDP last year, according to official data. The net federal revenues have witnessed a noticeable increase of 22.2 percent (1391 billion) for July-November against Rs1138 billion last year, while within revenues, non-tax posted a healthy growth of 17.7 percent, the data revealed. Total federal expenditures grew by 14.5 percent to Rs 2383 billion during July-November against Rs 2081 billion last year. Within total, current expenditures grew by 15.7 percent mainly due to higher mark-up payments and COVID related spending.Read More...

The Federal Board of Revenue (FBR) collection in the first seven months (July-January) of the current fiscal year stood at Rs2.570 trillion, surpassing the projected Rs2.550tr target by Rs20 billion, shows provisional data released on Saturday. However, the revenue collection increased by 6.4 per cent year-on-year when compared to Rs2.416tr during the same period last year. While preparing the budget for 2020-21, the government had assured the International Monetary Fund of raising Rs4.963tr as against Rs3.989tr collected in FY20 — a projected increase of 24.4pc. FBR Chairman Javed Ghani said the improved revenue performance is a reflection of growing economic activities despite facing the challenge of the second wave of Covid-19.Read More...

For the fifth fortnight in a row, the government on Sunday increased the prices of all petroleum products by 2.5 per cent to 4.6pc for the next 15 days. According to an announcement by the Prime Minister Office, the ex-depot prices of high speed diesel (HSD) and petrol were increased by Rs2.88 and Rs2.70 per litre, respectively. The prices of kerosene and light diesel oil (LDO) were jacked up by Rs3.54 and Rs3per litre, respectively. As such, the ex-depot price of HSD rose to Rs116.07 per litre from Rs113.19, showing an increase of Rs2.88 or 2.54pc. HSD is mostly used in heavy transport vehicles, trains and agricultural engines like trucks, buses, tractors, tube-wells and threshers. This is one of the key contributors to inflation. Its price has increased by 14.67pc (Rs14.85) since November 30 when it was sold at Rs101.22 per litre.Read More...

Prime Minister Imran Khan claimed on Sunday that inflation had currently declined from the level of 2018 when the Pakistan Tehreek-i-Insaf (PTI) came to power. “The government’s efforts are coming to fruition as both the consumer price index and core inflation had touched lower than the time of government’s formation,” the prime minister said in his tweet. “More good news on the economic front. Consumer price index & core inflation are both now lower than when our government was formed,” the prime minister said. The prime minister instructed his economic team to stay vigilant and ens­ure that inflation stayed under control.Read More...