Pakistan’s benchmark KSE-100 index remained under pressure during the month of Septermber-2021 as development on the foreign affairs front, weakening outlook on Macro Economy and rolling back of Monetary stimulus led to a 5.3% decline during the month.

KSE100 closed at 44,899 points – posting the largest monthly decline since March’2020. Index posted quarterly loss of 5.2% in rupee terms. However, in Dollar terms, KSE 100 posted a loss of 12.09%, making it third worst performance of any market in the world. Only Brazilian (-20.4%) and Hong Kong (17.36%) markets were further down than KSE100 during the quarter.

During the month, Commercial Banks saw sell of US$41.6mn while Technology sector recorded an inflow of US$7.8mn.

Outlook on the market remain uncertain as developments on the IMF front and possible adjustment in macro indicatorswill remain in news.

As per the sources, Electricity, fuel and gas prices adjustments are on the cards. While High Commodities prices will exert Inflationary pressure.

With SBP determined to take interest rates to Positive Real territory, the Interest rates and Inflation are likely to remain elevated.

However, one positive aspect is that market activity has shifted towards value and Blue Chip stocks compared to previous concentration in Side Board Items. Drastic decline in the Index has opened up valuations in value stocks which is expected to bring inflows.

The KSE100 index is currently 2.5% below its 200-period moving average and is in downward trend. Volatility is extremely high when compared to the average volatility over the last ten periods. There high chances that volatility will decrease and index will stabilize in the near term. Volume indicators reflect moderate outflows from the market which seems mildly bearish.

The Technical charts show that the index has immediate support at 44,500 level. A break below aforementioned support could drag the index level towards 44,000 – 44,300 area.

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