Stocks unlikely to escape bumpy ride this week

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Observer Report
Karachi

The Pakistan Stock Exchange (PSX) is unlikely to escape the bumpy ride this week and stocks are at a major risk of underperforming on back of rising coronavirus cases, lockdown fear, reduced business timing, and extended Eid holidays starting this weekend, besides political instability.

Another factor that can put pressure on stocks is an increase in the Consumer Price Index-based inflation, which surged by 11.1 percent on a year-on-year (YoY) basis in April 2021 as compared to an increase of 9.1 percent in the previous month.

On a month-on-month basis, it increased by 1.3 percent in April as compared to an increase of 0.3 percent in March.

On the other hand, the Federal Board of Revenue (FBR) collected net revenue of Rs3,780 billion during the first 10 month of the current fiscal year, exceeding the target of Rs3,637 billion by Rs143 billion.

This represents a growth of about 14 percent over the collection of Rs3,320 billion during the same period last year.

Again, the last four sessions remained bearish and it was only the Monday session when the benchmark KSE-100 index surged nearly 1,000 points with vital support coming from upbeat economic numbers.

Keeping the four red candle sticks and strong buying from brokers to the tune of $2,755,335 on Friday last in mind, there is a hope that the market may perform in green or losses will be in control.

Again, the prices of most of the shares in cement, bank, oil and gas marketing companies, oil and gas production companies, steel and other sectors are already very attractive

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