Search This Blog

Sunday, June 28, 2020

KSE100: Week 26-2020 Closing Notes

KSE-100 re-tested the lower band of its support of 33800 +/- 100 followed by a bounce. Now closing above the pivot of 34200 +/- 100 shall decide for further upwards break.

We would like to reiterate once again that the market is trading in a minor trend and a sustained break above 33600 +/- 300 would set it into a major bullish momentum. Volatility is expected to remain high as long as market trades below this level. 

On the global commodities front, oil has remained under pressure due to prospects of weak demand recovery and fears of second pandemic wave triggering a fresh lockdown. Heavy weightage of OEP in KSE100 could cause downwards drag on the index. On the positive front, further reduction in interest rate  (Monetary policy: SBP slashes interest rate by 100bps to 7%) can improve money flow into equities market as cash-based saving schemes become less attractive. 

The major money market event this week is a T-bill auction on 30th June for a target of 150 billion/PKR. A full calendar of auctions can be found here.

DoD Capitalization hints towards profit taking with recovery seen on the last day of trading. The weekly average closed with gains of +14.28 billion/PKR. From a wider perspective, the performance over the week has remained neutral in terms of capital flows. This affirms our view from previous updates that KSE-100 is undergoing consolidation with the exchange of hands between sectors. 

1 comment: