In what has been a tumultuous week for financial markets, stocks have managed to edge higher, providing a glimmer of hope for investors. Amidst ongoing concerns over the spread of the coronavirus and its impact on global economy, investors are closely monitoring developments in various industries and sectors. Despite the uncertainty and volatility, some stocks have managed to post gains, driven by positive earnings reports and the prospect of further stimulus measures by governments around the world. In this article, we will take a closer look at how the stock market has performed in the face of recent challenges, and discuss what investors can expect in the coming weeks.
The stock market began the week down in Karachi due to concerns of a potential rise in interest rates by the central bank, coupled with political noise which fed negative momentum. However, shares rallied after the central bank’s Monetary Policy Committee announced a lower-than-expected interest rate increase. Sentiment was boosted by a $2bn commitment of funds from Saudi Arabia, as bridging the external financing gap is necessary to complete the ninth review of the IMF program. The trade deficit fell 60% YoY to $1.46bn in March, its lowest level since February 2015, but Finance Minister Ishaq Dar’s cancellation of a trip to the US to meet the World Bank and IMF teams ended the momentum. By the end of the week, the stock market closed at 40,050 points, up 49 points or 0.12% from the previous week. The oil and gas exploration, technology and communication, power generation and distribution, fertiliser, and cement sectors contributed positively, while the auto assembling, tobacco, and commercial banking sectors contributed negatively. Foreign buying continued to climb to $4.7m, with significant purchases in exploration and production, and banks, while selling was reported by insurance and companies. AKD Securities advised caution until clarity on the IMF front emerges, and recommends investing in stocks with dollar-denominated revenue streams.
Overall, it was a week of ups and downs in the stock market as investors grappled with a multitude of uncertainties. Despite the volatility, stocks managed to notch gains by the end of the week, with some indices reaching new all-time highs. As we move forward, it is important to stay vigilant and keep a close eye on any developments that could impact the markets. Though the road ahead may be bumpy, investors can take comfort in the fact that the stock market has a history of resilience and long-term growth.
