KARACHI: Weak sentiments persist at the Pakistan stock exchange (PSX) with the KSE-100 index shedding another one percent during the week ended August 25, 2017 as political derailment puts economy in crosshairs, dealers said.

Adnan Sami at Topline Securities said Trump’s comments on Pak relations, domestic politics, and concerns over the country’s current account and dwindling reserves derailed the index. “Earnings have failed to spur interest, most being inline or missing while beats have been due to one-offs or reversals.”

The KSE-100 shares index shed 1.01 percent or 436.63 points to close the week at 42,641.75 points. KSE-30 shares index shed 0.65 percent and 144.13 points to end at 22,054.52 points.

Average daily trading volumes dropped by 10 percent to 165 million shares this week compared with 184 million shares last week.

Foreigners’ remained net sellers, offloading $9.7 million worth of shares during the outgoing week. “Foreign investors demonstrated their uneasiness over expected devaluation of the exchange rate with further selling,” Faizan Ahmed at JS Global Capital said.

Sector plays were reactionary to suggestions for economic stability; cements tanked 7.0 percent as concerns on price competition weighed heavy, oil marketing companies (OMCs) shed 3.0 percent likely on the notion that reducing petroleum consumption/imports may arrest the sliding deficit while exploration & production (E&Ps) and banks held their ground as potential currency depreciation and monetary tightening may bode well for the sectors.

An analyst at Elixir Securities said market participants opted value hunting approach during the outgoing week, as banking stocks led by Habib Bank (HBL), United Bank (UBL) and Bank Al-Habib (BAHL) cumulatively contributed 192 points to the KSE-100 Index.

“Pakistan Petroleum (PPL) and Pakistan Oilfields (POL) also continued to defy the broader market direction and added to their gains as local investors opted to hedge their investment portfolios with dollar hedged stocks.”

On the flip side, Lucky Cement (LUCK) and D.G Khan Cement (DGKC) dragged the benchmark index by 160 points as both the companies are exposed to the risk of possible cement price attrition in the Southern region owing to substantial upcoming capacity addition i.e. 61 percent of existing capacity.

Some other key news during the week include balance of payment (BoP) numbers showing a current account deficit (CAD) of $2.05 billion for July 2017, government planning an amnesty scheme and/or issue of $1.0 billion Eurobond to address deteriorating external account, large scale manufacturing (LSM) grew by a four-year high growth rate of 5.6 percent and electricity regulator approved Rs1.70/unit refund for July 2017 under monthly fuel adjustment.

Going forward, analysts expect weaker market participation among investors in the upcoming week due to looming political uncertainty and lower number of working days owing to Eid Holidays.