The Pakistani stock market remained under selling pressure and the KSE-100 index in July 2021 posted a negative return of 0.6%, or 301 points, to close the month at 47,055 points.
Lack of activity and dampened market sentiments as a result of continued rise in Covid-19 cases (rapid spread of the delta variant) and infection rates, which rose from 2-3% in June 2021 to over 7.0% on 20 Jul ’21 led to market underperformance.
The market also took impact of massive imports growth, weakening PKR / USD denomination, expected higher inflation rates, higher oil prices and tightening restrictions on the Sindh government’s expectations to contain the spread of the virus. In Karachi, the COVID positive cases rose significantly to over 20 percent.
Moreover, uncertainty about how the geopolitical scenario of the US withdrawal from Afghanistan and the decisive role of Pakistan in it remained high. Foreign investors also continued to sell, pulling $ 28.595 million from the Pakistani capital market during the month.
Average Trade volumes also remained sluggish as average daily volumes declined during the month, down 49 percent from the month.
Market is expected to take some positivity from upcoming results sessions where Banks, Cements and Steel sectors are expected to post strong profitability amid recovery in the economy.
Market can be dragged by continuation of Lock Down in Sindh, Higher positive cases, Any abrupt turn in Afghan Situation, and lower than expected results of Index heavy stocks.
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