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KARACHI: Bears dominated the stock market in the outgoing week as the KSE-100 index tumbled by 1,221 points, or 2.7 per cent, to close at 44,301.
The market has been unable to gain a firm foothold after it slipped from the recent high of 47,000 points. In the outgoing week, the market was held hostage to the flare-up in Covid-19 infection cases that forced the Punjab government to impose lockdowns in some big cities.
As the overall infection remained above 10pc, investors were worried over extension in lockdowns in other cities including Karachi. They were spooked by a repeat of the Feb 2020 slowdown in production and sales and supplies which would all go down to hurt the corporate bottom-lines in the quarterly results going forward.
On the economic side, the investors also ignored the lower than expected CPI of 9.1pc against consensus expectation of 9.6pc; heavy appreciation of the rupee against the dollar and the record high built-up in foreign exchange reserves. The outgoing week also saw successful issuance of the dollar-denominated Eurobonds in international markets that raised $2.5bn.
Going forward, veterans and experts predicted a range-bound or slightly positive market behaviour. The rupee on the upside, foreign exchange reserves piling up and receipt of more than $800m inflows under the Roshan Digital Accounts were all positive for the market.
Yet everything hinges on the course that the Covid-19 takes. However, optimists said that the upcoming results season with the roll out of financial figures from next week could support the market.