Pakistan stock market saw a negative week as Karachi stock exchange-100 index lost 526 points during the week.The political uncertainty , profit taking by large investors and fall in the oil prices and were three major factors affecting the Pakistan stock market.
Foreign investors showed some interest and they were net buyers during the week.They bought net equity of $ 9.5 million during the week.
The Karachi stock exchange-100 index showed some recovery as local and foreign investors showed some interest in the market week.The Pakistan stock market started the week at the negative note as Karachi stock exchange -100 index lost 1944 points during first two days of the week .
The negative sentiment of the stock market was mainly due to the prevailing uncertain political environment in the country. JIT is conducting inquiry of Sharif family and the relations between the JIT and ruling elite are very tense.
Karachi stock exchange -100 index made recovery in last three days of the week as it gained 1418 points.Stock market showed some recovery after investors showed some interest in the stock market trading .
Best and Worst Performing Sectors of the week
Power and textile sector were the main gaining sectors during the week.Power and textile sectors added 62 points and 42 points respectively to the Karachi stock exchange -100 index. Commercial banks,oil & Gas , automobile assembler and Pharmaceuticals were major losing sectors of the week. Commercial banks,oil & Gas , automobile assembler and Pharmaceuticals added negative points of 94 points, 90 points, automobile assembler 68 points, and 56 points to the Karachi stock exchange -100 index.
Market analysts are expecting a mixed market trend in the next week as investors will remain cautious due to political noise and selling trend in the market. Political uncertainty and international oil prices fluctuations are two most important factors expected to affect the market trend in the upcoming week.
JIT has just submitted its third report to the supreme court. JIT has complained that government institutions are not cooperating with the JIT members.Furthermore,ruling party is currently engaged in a direct confrontation with the supreme court and JIT .
Panama case investigation has entered into its last phase. JIT has also carried out an interrogation session with the son in law of the Prime Minister and ex interior minister Rehman malik .These political events are creating uncertainty and it will also affect the investing environment at the Pakistan stock market.So,value investors can surely invest in the undervalued stocks to improve their long run returns.
The middle east political situation is very tense and difficult. The relations between Arab countries and Qatar are far from improving.This political uncertainty can affect the global and Asian stock markets in the near future.
The OPEC is making efforts to control the prices but US oil stocks are very high and it is unlikely that oil prices will recover in near future. So,it is expected that international oil prices may fall more and currently they are at seven months low.
So ,investors should adopt buy and hold strategy as market sentiment is currently very negative.They can improve their long run returns prospects by investing in undervalued stocks in cement and power sectors.