Lahore - The stock market remained under pressure during the first three days of the week.

However, recovery was witnessed in the days to follow with smooth execution of the future roll over. Index closed at 134 (0.34 percent) in the green, at 39,926 level, rising over 1 percent WoW, with mixed sentiments during the ongoing result season. In this week again, most of the trading activity remained tilted towards low market capitalisation sectors such as gas utilities, leisure goods and beverages etc.

Heavyweight sectors, on the other hand, witnessed mixed trend. Sectors such as oil & gas and chemicals witnessed correction, while cements (in anticipation of strong Aug-16 off-take numbers) and banks (good corporate results) turned green towards the end of the week.

Moreover, foreigners turned out to be net buyers during the week worth $1.9 million. Faizan Ahmed, an analyst at JS Research, observed that disappointingly the overall participation remained thin with average value traded declining by 22 percent WoW to $97 million.

FXTM research analyst Lukman Otunuga commented that global stocks traded lower on Friday, as the ongoing debate between Fed policymakers over future US rate hikes sparked jitters, consequently overshadowing oil’s sharp resurgence.

Asian markets concluded on a depressing note after some Federal Reserve officials suggested the idea of a US rate hike in September which repelled investors from riskier assets.

European equities were punished by Asia’s bearish contagion, with most major stocks drifting lower as market participants reassessed the health of the global economy. Although Wall Street was uplifted by the rebound in oil prices that provided energy companies a welcome boost, losses could be realised if the Fed debate takes centre stage.

Lukman said that the short-term gains seen in global stocks had been undeniably impressive, but went against the fundamentals which did raise questions about the sustainability of the current market rally. He said that concerns over the global economy still lingered in the background, while uncertainty remained a persistent theme, leaving most investors anxious.

“Although speculative boost in oil prices have somewhat elevated global sentiment, it should be kept in mind that fears over the excessive oversupply are still present,” he said.

“Central Bank caution is still a theme in the markets and this could weigh down heavily on global confidence, consequently leaving stocks vulnerable to further losses,” Lukman added.

He said that with the ingredients of a bear market still present, investors should remain alert as it could take an unexpected catalyst to rapidly halt the stock market rally.

According to experts, average daily volumes for the week witnessed 1 percent rise, with volumes clocking in at 232 million shares. On the other hand, average daily values for the week fell by 22 percent, to Rs10.1 billion/$96.8 million.

Amongst major sectors, tobacco, food & personal care and oil & gas exploration sectors were up by 6.2 percent, 2.3 percent and 1.3 percent, respectively.

On the other hand, fertiliser and insurance sectors were down by 3.3 percent, and 1.3 percent, respectively.

Foreigners were the net buyers of $1.9 million worth of shares during the week. Oil & gas exploration sector witnessed net inflow of $7.3 million while the chemical sector recorded net outflow of $10.3 million.

Important news this week:

The Standard Chartered Bank (SCB) declared earnings of Rs 2 billion in 2Q2016, down by 6 percent YoY. This was mainly due to 8 percent YoY decline in net interest income (NII) to Rs5.1 billion. The result was accompanied by cash dividend of Rs0.75/share.

During the week, Glaxosmithkline Pakistan (GLAXO) announced its 2Q2016 earnings of Rs364 million, up 14.2 percent YoY. Revenues of the company rose by 14.5 percent YoY, to Rs6.8 billion.

Gross margins of the company clocked in at 23.5 percent, down 3 points YoY. In addition, selling and distribution expenses fell 23 percent YoY, to Rs696 million. According to the State Bank of Pakistan (SBP), the country paid $5.3 billion in debt servicing during FY16, as compared to $5.4b in the preceding fiscal year.

The interest paid during FY16 rose to $1.3 billion, up 3.1 percent YoY, while the repayment of principal amount decreased to $3.9 billion, down 6.4 percent YoY. As per news reports, in a recent meeting of Economic Co-ordination Committee (ECC), Finance Minister Ishaq Dar had ordered an inquiry against those who imported urea in huge quantities, creating a glut of this commodity across the country soon after its import.

Singapore's BW Group said in a statement that it would deliver the Floating Storage and Re-gasification Unit (FSRU) to Pakistan for its second LNG import terminal in the fourth quarter, along with LNG re-gasification services under a 15-year agreement.