PSX Daily Market Review - 7th Sep. 2017

Trading volume at PSX floor increased by 40.05 million shares or 37.17%, DoD basis, whereas, the benchmark KSE100 Index opened at 41846.18, posted a day high of 42054.07 and a day low of 41324.61 points during last trading session while the session suspended at 41389.99 with a net change of -389.21 points or -0.94% and the net trading volume of 76.34 million shares. Daily trading volume of KSE100 listed companies increased by 17.08 million shares or 28.82%, DoD basis.
Foreign Investors remained in a net selling position of 2.23 million shares and net value of Foreign Inflow dropped by 0.65 million shares. Categorically, Foreign Individuals remained in net buying positions of 0.076 million shares but Foreign Corporate and Overseas Pakistani investors remained in net selling positions of 2.29 and 0.02 million shares. While on the other side, Local Individuals, Companies, Banks and Brokers remained in net buying positions of 8.05, 4.26, 3.9 and 0.2 million shares respectively but Mutual Funds have offloaded their positions by 3.85 million shares.

Asian stocks tracked Wall Streets slide overnight to slip on Wednesday while the dollar was on the defensive with tensions in the Korean Peninsula showing little signs of abating. MSCIs broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dipped 0.15 percent. Japans Nikkei .N225 shed 0.55 percent and Australian stocks lost 0.3 percent. South Koreas KOSPI .KS11 was down 0.2 percent and on track for its fifth straight day of losses. Geopolitical concerns continued to simmer following North Koreas 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 Market is expected to remain volatile today. We advise traders to exercise caution. Buying on dips and booking gains on strength is recommended.

 

The Benchmark KSE100 Index faced resistance at 42000 and closed in negative zone during the last trading session. However, daily stochastic is still in bullish mode and hourly stochastic is attempting to generate a bullish crossover which could push the index in positive direction if accomplished, another supportive element is still present for the index as it did not close below 61.8% correction of its last two days bullish run. Therefore, it can be expected that if index does not open with a negative gap below 41298, then it still has momentum for a bullish rally towards its major daily correction levels. As of now, the index have supportive regions around 41000 and breakout of that level in bearish direction could drag it towards 40560 in coming days. Therefore a cautious trading approach is needed for current trading session. As long as index does not close above 42210 it will not be bullish.