Pakistan stocks to remain bullish amid quarterly results

Pakistan stocks witnessed profit taking in the outgoing week due to several reasons. However, the analysts are quite bullish on the coming week as the result season progresses.

Several stocks are likely to attract investor attention due to anticipated strong financial performance.

Sectors benefiting from monetary easing and structural reforms, especially high-dividend-yielding stocks, will attract investor interest. These stocks are expected to rerate as their yields align with fixed-income returns.

Pakistan’s market remained under pressure as both domestic and foreign investors opted for profit-booking in the oversold market.

The KSE-100 Index declined by 0.27 per cent during the week ended October 18, to close at 85,250.09 points.

Meanwhile, Pakistan successfully concluded the Shanghai Cooperation Organisation (SCO) summit, which boosted hopes for regional political and economic stability, enhancing market confidence.

Additionally, the government’s announcement to release outstanding payments to five IPPs from the 1994 policy and proposed four "take and pay" options to 18 Independent Power Producers (IPPs) of 2002 Power Generation Policies.

In the textile sector, Pakistan’s exports saw an 18% increase, reaching $1.6 billion in October 2024.

Indian Stocks

Despite heavy selling by foreign investors due to geo-political tensions, the long-term outlook for the domestic market remains strong, with stable growth and increased capex.

This week's market faced headwinds from FII selling, muted Q2 earnings, and high valuations. Market watchers expect short-term range-bound movement with a mixed bias.

Investors should focus on specific sectors and stocks, particularly large caps and growth areas like staples, agriculture, FMCG, consumption, power, digital, and infrastructure. The strategy will be to buy on dips in the short to medium term.

India’s BSE 100 Index closed the week at 26,309.78 points.

Meanwhile, DFM General Index closed at 4,469.25 points.

Currency

Pakistani rupee recorded a marginal improvement against the US dollar, appreciating 0.02% in the inter-bank market to PKR 277.61 during the week.

The US dollar rose for the second week in a row. This happened because last week’s strong job numbers made traders think the Federal Reserve won’t cut interest rates by half a percentage point at their next meeting.

The US dollar strengthened as uncertainty over the upcoming US election looms and as resilience in the US economy added to bets the Federal Reserve will be less aggressive in easing rates versus its peers elsewhere.