PSX Daily Market Review - 2nd Aug 2017

Foreign Investors remained in a net selling position of 3.95 million shares and the net value of Foreign Inflow dropped by 6.61 million US Dollars. Categorically, Foreign Corporate and Overseas Pakistani investors remained in net selling positions of 0.85 and 3.09 million shares. While on the other side, Local Individuals, Companies, Banks and NBFCs remained in net selling positions of 3.99, 1.63m 2.48 and 0.22 million shares, respectively. However, Local Mutual Funds and Brokers remained in net buying positions of 8.72 and 5.4 million shares.

Asian stocks paused near decade-highs on Wednesday as strong earnings results from tech bellwether Apple rippled out to component makers in the region. Shares in the world most valuable company surged 6 percent after hours to a record of more than $159, taking its market capitalization above $830 billion. That should help carry the Dow through the 22,000 mark when trading resumes in New York. E-Mini futures for the Dow were up 0.2 percent in Asia trade. The MSCI tech index for Asia rose 0.7 percent, bringing its gains for the year to almost 40 percent. MSCI broadest index of Asia-Pacific shares outside Japan was steady, having hit its highest since late 2007. Japanese Nikkei rose 0.4 percent. Oil prices were under pressure again amid rising U.S. fuel inventories and as major world producers kept pumping, causing investors to worry that several weeks of steady gains had pushed the rally too far.
The headline inflation inched up by 2.91 percent in July 2017 over the same month a year before due to a considerable increase in health and education cost, according to Pakistan Bureau of Statistics (PBS). The CPI inflation data released by the PBS at a press conference noted an increase of 0.34 percent in inflation during July 2017 over previous month of June 2017.
The New York-based credit rating agency Moody on Tuesday expressed fears that Nawaz Sharif disqualification as a member of parliament in the Panama Papers case could pose risks to continuity of policies in Pakistan and might impact adversely on its rating. “If heightened political uncertainty and strife among the various branches of government disrupt the administration economic and fiscal agenda, macroeconomic stability and the government’s access to external finance could be impaired, weighing on Pakistan’s credit profile,” the agency said.
Having imported over 6.1 million tons of LNG in last two years through country’s first LNG terminal located at Port Qasim, Pakistan is preparing to build at least 3 more LNG terminals at Port Qasim. The work on second LNG terminal is also going on and it is expected to become operational by early 2018. According to official sources, Pakistan has imported and degasified approximately 284.7 billion cubic feet of gas into gas distribution network which has helped bridge the gas demand and supply gap in the country which was facing acute shortage of power and gas both.
Reserves of the State Bank of Pakistan (SBP) decreased by $3.9bn between October and July 21 despite commercial borrowing of more than $4.4 billion in 2016-17. Currency experts said pressure is mounting on the exchange rate as reserves fall. Dealers in the interbank market said the dollar rate, after reversing from Rs108 to Rs105.40, has remained stable because of a strong influence of the SBP. However, they said the dollar rate, particularly in the interbank market, can see another appreciation if reserves continue falling.
The government has increased the general sales tax (GST) rate on high-speed diesel (HSD) and petrol to 40 per cent and 23.5pc, respectively. The move aims to generate windfall revenues for the government by not passing on the benefit of a fall in international oil prices to consumers. The GST rates on HSD and petrol were jacked up through statutory regulatory orders (SROs) by 19.4pc and 14.63pc, respectively, to ensure that petroleum prices remained unchanged.

Today ATRL, HTL, PAEL and PNSC  may lead the market in the positive direction.

The Benchmark KSE100 Index closed above its major resistant region after one and a half month but its still capped by resistant regions ahead which may push the index in negative zone if it fails to close above 47400. However, a closing above 47400 will open doors towards 49000, however, before that level index may find resistance ahead at 46800 and 47130 level. For the current trading session, Index is capped by a horizontal resistance at 46800 and 47130,  and if it fails to close above these two levels then a new bearish rally could be witnessed in coming days. Trading with strict stop loss is recommended for the current trading session.

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