Previous Session Recap
Trading volume at PSX floor dropped by 65.46 million shares or 20.45% on DoD basis, whereas the benchmark KSE100 index opened at 40,442.81, posted a day high of 40,704.22 and a day low of 40,259.03 points during last trading session while session suspended at 40,664.60 points with net change of 221.80 points and net trading volume of 157.14 million shares. Daily trading volume of KSE100 listed companies dropped by 60.48 million shares or 27.79% on DoD basis.
Foreign Investors remained in net selling positions of 20.13 million shares and value of Foreign Inflow dropped by 3.86 million US Dollars. Categorically, Foreign Corporate and Overseas Pakistanis remained in net selling positions of 0.24 and 19.88 million shares. While on the other side Local Companies, NBFCs and Brokers remained in net selling positions of 7.77, 0.05 and 0.63 million shares but Local Individuals, Banks, Mutual Fund and Insurance Companies remained in net buying positions of 20.03, 3.54, 4.62 and 1.48 million shares respectively.
Analytical Review
Asian shares adrift as tariff deadline looms
Asian stocks flatlined on Wednesday as Sino-U.S. trade talks approached a weekend deadline with little sign of progress, while a tightening of the UK election race knocked the pound. Investors are beginning to suspect that even if U.S. tariffs due to take effect on Sunday are delayed, it may be 2020 before Washington and Beijing can agree a broader rapprochement. In the absence of detailed trade news, focus moves to the U.S. Fed’s outlook for the economy due at 2000 GMT - along with an expectation interest rates will be held steady - and Thursday’s British election.
$1.3bn ADB inflow takes reserves to eight-month high
The State Bank of Pakistan (SBP) on Tuesday received $1.3 billion just a day after signing an agreement with the Asian Development Bank (ADB) in Islamabad. The $1.3bn inflow from the ADB pushed up central bank’s reserves to eight-month high at $10.41bn. Moreover, the country’s total reserves including central bank and commercial bank holdings also jumped to eight-month high reaching $17.293bn. The government, as part of the agreement with the ADB, plans to utilise $1.3bn for economic stabilisation programme.
Car sales plunge 44pc, tractor assembly halted
Overall car sales plunged 44 per cent to 49,110 units during the first five months of current fiscal year as demand for WagonR, Bolan, Toyota Corolla and Honda Civic/City slumped by around 35-75pc. In another depressing development in the auto sector, the Millat Tractors Ltd (MTL) — assembler of Massey Ferguson tractors — on Tuesday informed the Pakistan Stock Exchange (PSX) that the company will halt production from Dec 11 till Jan 3, 2020. The production operations will resume from Jan 6, 2020. The decision comes after MTL sales plunged by 48pc to 8,223 units during the July-November period. A Lahore-based MTL official told Dawn that the company had observed three non-production days (NPDs) each week in November but due to decline in booking orders, the company had decided to shut its operations by over 20 days.
Nepra imposes fine of Rs50m on KEL for violations of licence terms
NEPRA has imposed fine of Rs 50 million on Karachi Electric Limited (KEL) for violations of license terms/the regulator’s laws and directed to complete earthing and grounding of its distribution system by April 2020. NEPRA has also directed KEL to carry out third party verification of its distribution system, said a spokesman of the Regulatory Authority here. On July 29-31, 2019 and August 10-12, 2019, Karachi experienced heavy rain fall. Scores of people lost their lives due to electrocution and the supply remained suspended for long durations. The Authority initiated formal investigation to ascertain the facts and causes of fatalities and determine whether any violation of NEPRA laws has been committed by KEL, said the spokesman.
Weekly inflation falls 0.83 percent
Sensitive Price Indicator (SPI) based weekly inflation for the week ended on December 5, for the combined consumption group decreased by 0.83 percent as compared to the previous week. The SPI for the week under review in the above mentioned group was recorded at 135.18 points against 136.80 points registered in the previous week, according to the latest data released by the Pakistan Bureau of Statistics (PBS). The weekly SPI was collected with base 2015-16=100 covering 17 urban centers and 51 essential items for all expenditure groups.
Asian stocks flatlined on Wednesday as Sino-U.S. trade talks approached a weekend deadline with little sign of progress, while a tightening of the UK election race knocked the pound. Investors are beginning to suspect that even if U.S. tariffs due to take effect on Sunday are delayed, it may be 2020 before Washington and Beijing can agree a broader rapprochement. In the absence of detailed trade news, focus moves to the U.S. Fed’s outlook for the economy due at 2000 GMT - along with an expectation interest rates will be held steady - and Thursday’s British election.
The State Bank of Pakistan (SBP) on Tuesday received $1.3 billion just a day after signing an agreement with the Asian Development Bank (ADB) in Islamabad. The $1.3bn inflow from the ADB pushed up central bank’s reserves to eight-month high at $10.41bn. Moreover, the country’s total reserves including central bank and commercial bank holdings also jumped to eight-month high reaching $17.293bn. The government, as part of the agreement with the ADB, plans to utilise $1.3bn for economic stabilisation programme.
Overall car sales plunged 44 per cent to 49,110 units during the first five months of current fiscal year as demand for WagonR, Bolan, Toyota Corolla and Honda Civic/City slumped by around 35-75pc. In another depressing development in the auto sector, the Millat Tractors Ltd (MTL) — assembler of Massey Ferguson tractors — on Tuesday informed the Pakistan Stock Exchange (PSX) that the company will halt production from Dec 11 till Jan 3, 2020. The production operations will resume from Jan 6, 2020. The decision comes after MTL sales plunged by 48pc to 8,223 units during the July-November period. A Lahore-based MTL official told Dawn that the company had observed three non-production days (NPDs) each week in November but due to decline in booking orders, the company had decided to shut its operations by over 20 days.
NEPRA has imposed fine of Rs 50 million on Karachi Electric Limited (KEL) for violations of license terms/the regulator’s laws and directed to complete earthing and grounding of its distribution system by April 2020. NEPRA has also directed KEL to carry out third party verification of its distribution system, said a spokesman of the Regulatory Authority here. On July 29-31, 2019 and August 10-12, 2019, Karachi experienced heavy rain fall. Scores of people lost their lives due to electrocution and the supply remained suspended for long durations. The Authority initiated formal investigation to ascertain the facts and causes of fatalities and determine whether any violation of NEPRA laws has been committed by KEL, said the spokesman.
Sensitive Price Indicator (SPI) based weekly inflation for the week ended on December 5, for the combined consumption group decreased by 0.83 percent as compared to the previous week. The SPI for the week under review in the above mentioned group was recorded at 135.18 points against 136.80 points registered in the previous week, according to the latest data released by the Pakistan Bureau of Statistics (PBS). The weekly SPI was collected with base 2015-16=100 covering 17 urban centers and 51 essential items for all expenditure groups.
Market is expected to remain volatile during current trading session.
Technical Analysis
The Benchmark KSE100 index is being capped by a descending trend line along with a crossover of two trend lines on daily and weekly chart and it's becoming able to close above this region since last week. As of now index is coming back after creating a cheat pattern of evening shooting star on daily chart and It's expected that index would face resistance between 40,860-40,960 points initially and if it would succeed in penetration above these regions then next target would be 41,360 points but to break those regions index would need some fresh volumes therefore it's recommended to stay cautious below 41,000 points because if index would not succeed in closing above its resistant regions then it would bounce back to retest its supportive regions standing at 40,140 points and 39,760 points. It would be better to wait for a breakout above 41,000 points before initiating new long positions and avoid short selling until index gave a clear confirmation of breakout on either side.
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