Karachi, March 05, 2021 (PPI-OT): Political jitters kept market on edge
After remaining on edge in the initial trading sessions of the week, the market plunged by more than 800 points on Thursday before making a sharp recovery on the next day, ending marginally down by 0.1% WoW. Thursday’s reaction was on the cards, given the hotly contested Senate elections. To summarize, the ruling party gained in terms of representation in the Senate (however, still in a minority compared to the opposition coalition), but lost a key seat from Islamabad on which the Finance Minister was contesting. And with the Prime Minister seeking a vote of confidence from Parliament tomorrow (i.e. March 6, 2021) following the election result, the reaction was expected. But so too was the recovery, given the preceding momentum.
On the economic front, headline inflation surged to 8.70% YoY. Amid the political uncertainty and weakened sentiment, market activity suffered, as depicted by the WoW decline in volumes (down 35%). Other noteworthy news during the week included (1) PM approves cross-border yarn import, (2) Feb trade deficit widens 23.93pc YoY, (3) Rupee hits 1-year high of 157.1 versus dollar, (4) Cement sales up, exports down in February, and (5) Serious water shortage imminent as dry season continues.