KSE expected to remain lacklustre

Foreign selling, futures roll-over and the lack of triggers kept the market in bearish mode, while the benchmark index closed down 2.6 percent to an eight-week low of 32,960 points.
Faizan Ahmed at JS Global Capital said the equities plunged amid incessant foreign selling and weak local sentiments.
"Skepticism over key triggers on the macroeconomic front such as CPEC and the rupee-dollar parity continued to spook investor sentiments. Pressure in the regional stock markets after Turkey-Russia disaster and negative news flow pertaining to imposition of new taxes also hampered the market activity."
The KSE-100 shares Index shed 896.27 points, or 2.64 percent, to close the week ended November 27 at 32,960.27 points. The KSE-30 shares Index shed 595.21 points, or 2.97 percent, to end the week at 19,405.58 points. Average daily volumes dropped by 18 percent to 143.3 million shares a day.
Mohammad Sohail at Topline Securities said foreigners were net sellers, offloading shares worth $13.1 million and taking month to-date outflows to $44.9 million.
“Major selling was seen in banks and chemical sector with net outflows of $6 million and $5.7 million, respectively.”
Dealers said volatility in oil prices continued on the reports of increasing supply in the global markets and speculations over the outcome of the upcoming OPEC meeting. As a result, the market tumbled with low volumes and across-the-board selling was witnessed in the index heavyweights such as cement, banks, oil and gas and fertilisers.
An analyst at KASB Securities said uncertainty regarding new regulation for brokerage houses and drag from continuous foreign institutional portfolio investment outflow added to the negative sentiment.
“Stocks with heavy net open position in the future contracts at the start of the week faced heightened volatility,” a report issued by KASB Securities said.
Central bank kept the policy rates unchanged in line with the general market expectations, citing a potential rebound in CPI and other inflationary pressures.
The government decided to increase the regulatory duty on steel items to bridge the revenue shortfall and plans to impose regulatory duty on imported vehicles, as well.
The government is also considering launching a scheme to bring the traders within the tax net.
Fertilizer offtake data for the month of October pointed to a major turnaround in phosphate offtake after subsidy, while nitrogen heavy elements continued to suffer due to expectation of a fall in prices.
Acquisition / merger news flow picked up this week with Engro Corporation announcing that the company received buyer interest for its stake in Engro Polymer and Chemicals Limited (EPCL) and the announcement of merger between Mobilink and Warid within Pakistan’s telecom sector.
Other developments during the week included ADB signing an agreement with the government to provide up to $800 million as loans to the energy sector for investment in metering infrastructure and sustainable reforms.
Analyst at Arif Habib Limited (AHL) said weak sentiments heightened by the rupee depreciation in recent weeks and foreign selling had halted the market progress.
“We believe that the dullish trend will hold true in the near term, as tensions persist in the region of an imminent rate hike by the US Fed, either in December or January. The market will probably remain under pressure in the coming week due to these factors, we anticipate,” AHL report noted.
However, long-term outlook for the market is highly positive as overall macros continue to improve, opening up enticing valuations.