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Stock Review


KSE-100 Index opened the week on a positive note and remained bullish throughout the last trading session of the week keeping its upward movement with a gain of 140 points to close in green at 47,806 levels in the last trading session on Friday.

The bullish momentum and the market behavior is a quite indicative that the Index is looking to achieve an all-time high 48,000 levels, which seems to be quite within reach in a couple of next trading session.

The closing of the Index above critical level of 47,600 levels was a double top formation on daily chart. Trading above 47,800 indicated that the Index could now target weekly upward trend line resistance, which is plotted at 48,400, said market analysts.

It may be mentioned that the week started on a positive note, after three consecutive sessions of profit-taking. Despite oil prices supporting the heavy weights, Index were only able to post nominal gains over the week and closed at 47,807pts (up 2.5% WoW). The closing, however, was an all-time high, providing a befitting end to CY16 where market performed 46 percent with Foreign Institutions Portfolio Investment (FIPI) registering an outflow of US$340mn. On WoW basis, the average volume traded decreased by 15.1% and the average value of shares traded decreased by 14.1%.

Although the current rally in international oil prices following unanimous decision of OPEC to have a cap on oil production by the member countries was expected to that oil prices would keep on going yet the strong us inventory data brought a dent into the rising oil prices. The international oil prices fell slightly on Thursday after EIA crude oil inventories data reported an increase of 0.6mnbbl in the week as compared with the forecast of a decline by 2.1mnbbl. Crude oil prices have risen about 45% this year, biggest yearly gains since 2009, after OPEC and non-OPEC, for the first time in 15 years, decided to cut their oil production in order to support the prices. In addition, Kuwaiti oil minister said that a committee of OPEC and non-OPEC members will meet in Vienna on 20-21 January to discuss and ensure the compliance on the agreement.

Meanwhile the cement, financial and oil based stocks have a bright prospect for attracting the investors on the back of demand growth and oil price stability going forward. For week under review Pakistan Tobacco Company, Engro Foods Limited, IGI Insurance, Saif Power Ltd and Nishat Power Ltd were the major gainers while Bata (Pakistan), Indus Dyeing, J.D.W Sugar, Pak Services, and Habib Metro Bank were the major losers in the benchmark KSE-100 this week.

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