The stock, which had an uncertain outgoing week, punctuated with sharp swings and a slumber crawl, is unlikely to ease the prevailing downtrend ahead of the monetary policy announcement, traders said.
The Pakistan Stock Exchange's KSE-100 stock index (PSX) closed week-on-week down 1.63 per cent or 745 points at 45,018 points.
Arif Habib Ltd, in its weekly market review, said investors should be cautious as the MPC (Monetary Policy Committee) will meet on January 24 even as inflationary pressures were set to increase in the backdrop of rising commodity prices.
"In addition, negotiations with the IMF are expected to resume on January 28, which may have a positive impact on the market," the brokerage said.
Spectrum Research expects the State Bank of Pakistan (SBP) to keep the policy rate unchanged at 9.75 per cent.
"We believe, SBP is evaluating the impact of tighter monetary policy on economic growth and inflation."
Further, spectrum analysts said, in the last MPC meeting, it was stated that the ultimate target of marginally positive real interest rates on a future basis was now close to being achieved.
"Therefore, the policy rate is likely to
To remain unchanged in the upcoming monetary policy meeting,” said the brokerage report.
The market started negative this week and could not come out of the red zone for the whole week due to resurgence in Covid-19 cases and high global commodity prices.
However, sentiment turned positive on Friday after GDP figures rose by 5.4 per cent from 3.94 per cent.
Further, FDI during the first half of the financial year increased by 20 per cent to $1.05 billion as against $880 million in the same period last year, which was taken by investors positively.
Average trading week-over-week saw 201 million shares drop 43 percent, while average trading value closed 17 percent week-on-week down at $42 million.
Foreigners remained net sellers this week at $2.09 million, compared to net purchases of $0.53 million last week.
Major sales were seen in oil marketing companies ($1.4 million) and technology and communications ($1.0 million). On the local front, purchases were reported by individuals ($12.4 million), followed by banks ($5.9 million).
Sector-wise negative contribution came from Technology and Communications (241 points), Commercial Banks (96 points), Cement (69 points), Refineries (65 points) and Fertilizers (63 points).
The negative contributors were TRG (239 points), CNERGY (31 points), MCB (23 points), DAWH (22 points), and PSO (21 points).
Sectors that contributed positively were oil and gas exploration companies (36 points), electricity generation and distribution (7 points), and real estate investment trusts (6 points). Meanwhile, share-wise positive contribution came from KAPCO (30 points), MARI (24 points), and BAHL (23 points).
Waseel Zaman, an analyst at JS Research, said the market remained under pressure throughout the week with the biggest fall on Thursday.
“Investor participation was impacted during the week as it declined 43 per cent in terms of volume to 201 million shares, while the average daily traded value saw a decrease of 17 per cent,” he said.