Stocks shed 172 points in shortened week.

KARACHI -- The four-session outgoing week remained predominantly in the control of bears who wiped out 171.72 points (0.50 per cent) from the KSE-100 index, which settled at 33,837.

The State Bank policy rate reduction by 100 basis points the earlier Friday failed to impress stock traders as the week commenced on loss of 203 points from the index on Monday. In three out of four sessions, the market gave way to profit-booking.

Reasons for the investors' lacklustre interest in stocks were mounting concerns about the rapid spread of COVID-19 that saw the number of infected persons rose over 50,000 with more than a thousand dead. The bleak picture of the economy painted in the central bank's May monetary policy statement and Moody's decision to put Pakistani banks under review for rating downgrade, all of which kept the market on the downside.

On the macroeconomic front, provisional GDP growth figures released by the Ministry of Finance depicted a 0.4pc contraction in FY20. Weak external account data (CAD at $572 million in Apr'20; exports down by 23.5pc and remittances 5.5pc month-on-month) further deteriorated investors' confidence.

Among some of the positive news, the successful issuance of Rs200 billion Sukuk-II kept investors engaged in energy chain stocks. On the fiscal front, the statement of the finance adviser that the government will not introduce any new tax in the upcoming budget was a sigh of relief for the business community.

On the monetary side, cut-off yields of recently held T-bill auctions remained lower compared to the secondary market in three-, six- and 12-month tenors, respectively. Moreover, participants decided against building...

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