PSX Daily Market Review - 6th Sep. 2017

Trading volume at PSX floor increased by 37.21 million shares or 52.73%, DoD basis, whereas, the benchmark KSE100 Index opened at 41206.99, posted a day high of 41833.70 and a day low of 41070.99 during the last trading session. The session suspended at 41779.20 with a net change of 572.21 points and a net trading volume of 59.26 million shares. Daily trading volume of KSE100 listed companies increased by 15.28 million shares or 34.75%, DoD basis.
Foreign Investors have turned back to buying again and they remained in a net buying position of 6.18 million shares and the net value of Foreign Inflow increased by 6.34 million US Dollars. Categorically, Foreign Individual, Corporate and Overseas Pakistani investors remained in net buying positions of 0.1, 5.68 and 0.4 million shares, respectively. While on the other side, Local Individuals remained in a net buying position of 6.23 million shares but Local Companies, Banks, Mutual Funds and Brokers remained in net selling positions of 0.65, 0.7, 8.24 and 2.2 million shares, respectively.

Asian stocks tracked Wall Street’s slide overnight to slip on Wednesday while the dollar was on the defensive with tensions in the Korean Peninsula showing little signs of abating. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dipped 0.15 percent. Japan's Nikkei .N225 shed 0.55 percent and Australian stocks lost 0.3 percent. South Korea's KOSPI .KS11 was down 0.2 percent and on track for its fifth straight day of losses. Geopolitical concerns continued to simmer following North Korea’s biggest-ever nuclear test on Sunday. Pyongyang is ready to send “more gift packages” to the United States, one of its top diplomats said on Tuesday. Against such a backdrop U.S. stocks sank overnight, with the S&P 500 .SPX stumbling to its biggest single-day loss in about three weeks.
Taking notice of the decline in the investment in agriculture sector after the devolution of the sector to provinces, Prime Minister Shahid Khaqan Abbasi directed the Ministry of National Food Security and Research to ensure allocation of greater resources in the sector by taking the provincial governments in loop. He expressed these views during the briefing on agriculture sector given to him by the Minister for National Food Security and Research Sikandar Hayat Bosan on Tuesday. The prime minister directed the minister to bring the matter of decline in investment in the sector at the platform of Council of Common Interest (CCI) so that the provincial governments should be taken into loop to enhance capital inflow in the sector for the collective good of the nation.
The All Pakistan Textile Mills Association (Aptma) Punjab Chairman Syed Ali Ahsan has rejected the unilateral and sudden reduction in system gas supply by the SNGPL. The SNGPL has reduced the system gas supply to 28 percent from 35 percent with effect from September 1, 2017 on account of fast approaching of winter. The Aptma Punjab chief said a sudden and unilateral reduction of system gas by 30 mmcfd is worrisome when already 35 to 40 percent of the industrial capacity has been closed down due to high cost of energy. It would further add to the high cost of doing business for industry in Punjab, he added. Textile industry consumes 300 mmcfd gas, including 200 mmcfd RLNG and 100 mmcfd system gas. Now, the SNGPL has reduced the system gas supply on a lame excuse of drop in mercury. He said the industry has an established right on the system gas, which the SNGPL is making expensive through unjustified steps. Such a sudden and unilateral decision is not acceptable, he stressed.
The Punjab Provincial Development Working Party has approved five development schemes of road sector with an estimated cost of Rs8660.384 million. These schemes were approved in the 14th meeting of Provincial Development Working Party (PDWP) of current fiscal year 2017-18, presided over by Chairman P&D Muhammad Jahanzeb Khan.
Inflation rate has once again recorded an increase and climbed to 3.4 percent during August over a year ago mainly due to increase in prices of food commodities. The inflation measured through Consumer Price Index (CPI) has recorded at 3.4 percent during August as against same month of the last year, according to the latest data of Pakistan Bureau of Statistics (PBS) released on Tuesday. The inflation has registered increase during previous month after coming down to 20 months lowest level in July 2017. Inflation has shown increase of 0.2 percent on monthly basis. The inflation has enhanced due to increase in prices of food commodities ahead of Eidul Azha.

The Benchmark KSE-100 Index posted a relief rally, closing below the high of 29^th August 2017, at 41779. We foresee an immediate resistance at 9DMA currently placed at 41924.60. However, a breach above it may lead the Index to 42124 and 42300, where we expect strong resistance. Although the short term trend is bullish, but Traders must not ignore the downside with immediate support at 41040 and 40842.  Any breach below the said levels may result in a deeper correction towards 40200-40000 region in the sessions to come.