PSX remained weary of political scene today with low level of trading activity. KSE100 traded today within a range of +114 and -328 finally closing at 286 points (-0.66%) at 43,367. Despite negative closing, PSX is not under any selling pressure. Mutual Funds were net buyers today. 'Foreigners' were also net buyer today. In general things appear stable.
Steel and Cement prices have been increased to pass on cost increase. In general construction activity in the country is immense at the moment. Substantial capacity utilization in these industries with demand stemming from primarily small consumers base is a good sign.
Pakistan is facing pressure on public finances and exchange reserves a prices of commodities especially Oil remains at elevated level despite some decline last week. Global increase in commodity prices will further add to inflation at home. This creates a difficult situation for Pakistan economic managers. Recently announced relief package that reduces petrol and electricity prices is a difficult sell to IMF. Market participants remained focused on these issues. Recent MPC keeping policy rate unchanged and subsequent Tbill auction witnessing around 100bps raise in the market is one instance of disconnect between market forces and policy aims.
In international markets Oil on downward trend. Brent trading below $105, down 7% on hopes of a diplomatic solution to Russian-Ukraine war. US Deputy Secretary of State yesterday had indicated that Russia is showing signs it might be willing to have substantive negotiations over Ukraine. There may be resumption of talks between Russia and Ukraine today.
