Morning Market Brief 20th April. 2022

Technical Overview

The Benchmark KSE100 index is taking correction to retest resistant trend line of its previous descending wedge as supportive region on daily chart, meanwhile expansion of its last correction already have been completed so therefore it's expected that index would continue its bullish journey after retesting its supportive regions. For current trading session it's expected that index would try to establish ground above 46,150pts-46,000pts region and it would start rallying towards 46,650pts where it would face initial resistance from a horizontal resistant region on hourly chart while breakout above that region would call for 46,850pts and 47,200pts in coming days. Currently daily MACD is still bullish therefore it strengthens bullish sentiment for short term basis and 47,000pts would react as a pivotal value in coming days and once index would succeed in closing above this region then bulls would take control and they would push index towards 47,700pts and further more.
While on flip side in case in case index would succeed in sliding below 46,000pts then next major supportive region would fall between 45,900pts-45,650pts where retesting of previous resistant trend lines would also complete and index would be considered bullish as long as it's trading above 45,650pts on daily chart.

Stocks wobble as China lockdowns drag

Oil and stock markets were under pressure on Wednesday on worries about the fallout from China's pandemic lockdowns, while the yen slightly extended its record losing streak as traders put Japan's ultra-easy monetary policy settings to the test.The Chinese yuan hit its lowest since October after the central bank promised support for the services sector, but was volatile as China also surprised and disappointed equities investors by not cutting lending rates. MSCI's broadest index of Asia-Pacific shares outside Japan was steady as modest losses in Hong Kong and Shanghai offset gains in Sydney. Japan's Nikkei trimmed early gains to stand 0.5% higher by mid morning.Read More...

Business News

Dollar surges to Rs184.44 on strong demand

The US dollar on Tuesday gained another Rs1.90 against the local currency in the interbank market on strong demand for greenbacks amid tight supplies. Currency dealers were not sure for any immediate support to help out the local currency from frequent depreciation against the US dollar but waiting for good outcome from fresh talks with the IMF and foreign tour of Prime Minister Shehbaz Sharif. The dollar was traded with restricted approach by banks but could not stop it from appreciating against the rupee. The closing price was Rs184.44 against Rs182.54 a day earlier, according to the State Bank of Pakistan (SBP).Read More...

IMF sees Pakistan's current account deficit, inflation at higher levels

The International Monetary Fund (IMF) on Tuesday forecast Pakistan’s economic growth rate at four per cent, and higher than estimated inflation and current account deficit during the ongoing fiscal year. The growth forecast is generally in line with similar estimates by other development lenders — such as the World Bank’s 4.3pc and Asian Development Bank’s 4pc — and credit rating agencies — Moody’s 3-4pc — but significantly lower than a 4.8pc target set in the budget 2021-22. In its World Economic Outlook (WEO) 2022, the IMF projected an 11.2pc average rate of inflation for the current year against 8.9pc last year. The Washington-based lending agency also worked out Pakistan’s current account deficit at 5.3pc of GDP (up from just 0.6pc last fiscal year) and 7pc unemployment rate, slightly lower than 7.4pc of last year.Read More...

Power firms seek Rs75bn additional charges from users

Power distribution companies (Discos) have sought an additional Rs74 billion in May by charging consumers about Rs32bn as monthly fuel cost adjustment (FCA) and Rs42bn as quarterly tariff adjustments (QTAs).The ex-Wapda power companies have filed a combined petition for the approval of additional FCA at a uniform rate of Rs3.16 per unit for electricity they sold to consumers in March to generate about Rs32bn. They have filed separate petitions for combined additional revenue of Rs41.98bn as QRA for October-December 2021.The National Electric Power Regulatory Authority has called two separate public hearings on April 27 and 28 to examine if the demands for higher FCA and QTA by these Discos were justified.Read More...

Jul-Mar FDI declines 2pc to $1.285bn YoY

Foreign Direct Investment (FDI) witnessed negative growth and declined by two percent during the first nine months of this fiscal year (FY22). The State Bank of Pakistan (SBP) reported on Tuesday that Pakistan fetched FDI amounting to $1.285 billion during July-March of FY22 as against $1.311 billion in the same month of the previous fiscal year (FY21), showing a decline of $26 million. During the period under review, overall FDI inflows were $1.967 billion against $682.4 million outflow. The detailed analysis revealed that although overall FDI from China fell sharply 48 percent during the period under review, it still has the largest 26 percent share in overall FDI this fiscal year. Highest FDI amounted to $333.5 million was arrived from China during the first nine months of this fiscal year as against $641 million in corresponding period of last fiscal year.Read More...