Stocks seen mostly upbeat in cautious trade

Capital market braved out a tumultuous week amid US vote controversy-led global rout and fears of second virus wave economic restrictions, but is seen holding ground in cautious trade, dealers said.

Pakistan Stock Exchange's KSE-100 shares index climbed 2.2 percent or 844 points during the outgoing week to conclude at 40,732 points (WoW).

Muhammad Saeed Khalid, head of research at Shajar Capital, said, “We expect the market to recover on the foreign participation mainly on the announcement of US election results earlier this weekend”.

“We also believe the announcement of automobile numbers along with the publishing of advance trade numbers may boost interest in exports and technology scrips,” Khalid said.

Ansreren Malik, at equity sales desk of BMA Capital Management, said, “Considering the fresh liquidity injections from local and foreign investors, and the rupee appreciating against the dollar, “we expect the market to remain upbeat”.

“We advise investors to remain cautious amid growing uncertainty over soaring COVID-19 infections and high inflation,” she said adding that the US vote and crashing crude oil might keep stocks under pressure next week.

Average daily volumes and traded value for the outgoing week were down by 21% and 20% to 368 million shares and $79 million, respectively.

Brokerage Arif Habib Limited said, "We expect the market to remain green due to improvement on the macroeconomic front amid reduction in trade deficit (rising exports and decreasing imports), strengthening PKR/USD parity, no expectation of immediate rate hike, and robust dispatches reported by cyclical sectors”.

However, a surprise swing in the US elections might disrupt global investors’ confidence together with rising global coronavirus cases as daily cases crossed 600,000-mark for the first time on November 5, 2020, exerting pressure on countries to impose a lockdown, the brokerage added.

Currently, active COVID-19 cases in the country stand over 16,000-mark with average of 1,250 cases being reported daily. Globally, several countries, mainly Europe have announced re-imposition of lockdown as the second wave of the pandemic sent infections rising to record levels.

Additionally, the uncertainty around the outcome of US presidential elections aided the market volatility and triggered selloff in the emerging markets, while crude oil slumped around 2 percent over the last two days to $38.1 per barrel.

On the economic front, CPI (Consumer Price Index) inflation clocked in at 8.9 percent.

On the other hand, the trade deficit was recorded at $1.7 billion, whereas exports rose 3 percent and imports fell 5.7 percent in October 2020.

Foreign investors sold equities worth of $5.50 million compared to $21.34 million last week.

Major selling was witnessed in commercial banks ($3.46 million) and E&Ps ($1.86 million).

On the local front, individuals bought stocks worth $5.37 million, followed by insurance companies that invested $3.63 million in the capital market.

Contribution to the upside was led by commercial banks (203 points), oil and gas exploration companies (149 points), technology and communication (97 points), cement (74 points), and fertiliser (57 points).

Scrip-wise major gainers were POL (90 points), TRG (83 points), MEBL (61 points), BAFL (35 points), and HMB (33 points).

Whereas, scrip-wise major losers were HBL (38 points), FFC (14 points) PAKT (13 points), MUREB (6 points), and APL (6 points).