KSE-100 Index showed some resilience to the bearish momentum by gaining 119 points to close in green at 48409 levels yet amid sluggish market volumes of 212 million all shares here on the last trading session of the week. According to market analysts, there was a widespread impact on the bourse of the US Federal Reserve which increased rates by 0.25%, taking the overnight fund rate to a target range of 0.75% to 1.0%.
This was the 3rd hike over the last 18 months and sets the ground up for up-to 50bps further hike in USD interest rates during CY17. The Fed’s decision to tighten interest rates will have ramifications across financial markets with Emerging Markets (EMs) particularly vulnerable. Continued decline in commodity prices in confluence with risks on emerging economies’ currencies could result in continued outflows.
Idiosyncratic nature of the Pakistan’s economy saw PKR remaining stable in the three months following the last two rate hikes. However with pressure building on the currency given ballooning CAD position, we may see PKR ultimately losing against USD Oil prices fell on Thursday after three consecutive positive sessions on concerns about rising oil inventories and production facility.
However, Saudi energy minister said on Thursday that OPEC could extend its oil output cut deal if crude inventories continue to surge. On the home front Bank of Punjab was the volume leader of the day with a trade of 30 million shares to its credit. The next volume leader was Habib Bank with a trade of 15 million shares while FCCL was the third volume leader of the day with a trade of 8 million shares to its credit.