Morning Market Brief 31st Aug. 2020

The Benchmark KSE100 index is moving in an upward price channel on hourly chart and have face a slight resistance from its previous top of 40,117pts during last trading session but sentiment is still bullish as index have rejected effects of previous weekly evening shooting star by creating a bullish engulfing pattern. As of now it's expected that index would try to continue its bullish journey towards 41,340pts initially while breakout above that region would call for 41,500pts and 41,760pts, while it would face major resistance between 42,000pts-42,200pts. While on flip side in case of bearish pressure index would try to find ground at 40,780pts where a strong horizontal supportive region would try to push index in upward direction followed by a strong supportive region at 40,445pts.
It's recommended to stay cautious and trade with trailing stop loss because daily and hourly momentum indicators are slightly under pressure as MACD have turned its direction towards bearish side on both time frames and if it would not start recovery then index start sliding any time. Meanwhile stochastic is trying to generate a bullish crossover on hourly chart which would try to pump some fresh volumes but daily stochastic seems turning down which could be dangerous if MACD would not start a pull back.

Asian shares notched a 29-month high on Monday as investors wagered monetary and fiscal policies globally would stay super stimulatory, while an upbeat reading on China’s service sector augured well for continued recovery there.MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.5% to reach its highest since March 2018, extending a 2.8% gain last week. Chinese blue chips .CSI300 firmed 0.7% to reach levels not seen since mid-2015. Surveys showed Chinese manufacturing activity edged back a tick to 51.0 in July, but services jumping a full point to 55.2 in a hopeful sign of reviving consumer demand. E-Mini futures for the S&P 500 ESc1 climbed another 0.5%, while EUROSTOXX 50 futures STXEc1 added 1%.Read More...

The Federal Board of Revenue (FBR) has raised more than Rs5.8 billion in the last one year from expatriates and travellers on import of mobile phones under baggage. Since July 1, 2019, the government has withdrawn the facility of duty-free mobile handset under the baggage rules from abroad. The decision, according to the FBR, was taken following receipt of numerous complaints of the scheme’s misuse. Official data available with Dawn show that travellers brought as many as 1,389,707 mobile handsets between in FY20 under the baggage and registered it with Device Identification Registration and Blocking System (Dirbs).Read More...

Governor of State Bank of Pakistan (SBP) Reza Baqir has said that bankers and borrowers should show maximum flexibility for immediate revival of sick industrial units. He was addressing a zoom conference with the Faisalabad Chamber of Commerce & Industry (FCCI) members on a specific issue of sick industrial units. He said:” The COVID-19 has put negative impact on the national economy and we must take necessary measures to generate and accelerate the industrial activities as it is a prerequisite to produce exportable surplus in addition to create much needed jobs for the youth.” He said the SBP was already making efforts to revive the sick units as it was a shortcut to catalyze the national economy. “In this connection, bankers and borrowers have been brought on the same table”, he said and added that” Now our efforts are focused to make these meetings result oriented and meaningful so that the closed units could be revived without any further delay.”Read More...

The country’s fiscal accounts came under significant pressure during the fourth quarter (Q4) of the financial year 2020 due to COVID-19 related expenditures, according to Monthly Economic Update and Outlook. The overall fiscal deficit stood at 8.1 per cent of GDP in FY 2020 against 9.1 per cent of GDP recorded in the previous year, said a report released by the Finance Ministry. The fiscal deficit has been contained due to the significant rise in total revenues (28 per cent) that outpaced the growth in total expenditures (16 per cent). The quarter- wise breakup reveals that the fiscal deficit was 4.0 per cent of GDP up to Q3, while last quarter of FY2020 alone registered the deficit at 4.1 per cent of GDP, it said. “This shows that fiscal accounts came under significant pressure during the fourth quarter of FY2020 due to COVID-19 related expenditures,” it added. Meanwhile, the primary balance was restricted to 1.8 per cent of GDP against the deficit of 3.6 per cent of GDP in FY2019. Read More...

The exports of plastic materials witnessed decrease of 34.38 percent during the first month of current financial year (2020-21) as compared to the corresponding period of last year. Pakistan exported plastic worth $18.895 million during July 2020 as compared to the exports of $28.793 million during July 2019, showing a decline of 34.38 percent, according to the Pakistan Bureau of Statistics (PBS) data. In terms of quantity, the exports of plastic also declined by 16.26 percent as the country exported 21,022 metric ton of plastic during the period under review as compared to the exports of 25,104 metric ton during last fiscal year.Read More...