Morning Market Brief 18th Sep. 2020

The Benchmark KSE100 index is moving downward after facing rejection from resistant trend line of its rising wedge on daily chart and now it would try to find ground at supportive trend line of this wedge along with a strong horizontal supportive region of 42,100pts but breakout below that region would push index further downward and this bearish pressure could lead index towards 41,900pts on intraday basis. While daily closing below 42,000pts would strengthen bearish momentum and meanwhile breakout of this rising wedge would take place in bearish direction therefore it's recommended to stay cautious and post trailing stop loss on existing long positions. While for day trading buying dip with strict stop loss of 41,900pts could be beneficial because index would try to recover after a dip on intraday basis but that spike could not last for long enough because index is being capped by strong resistant regions at 42,500pts followed by more resistant regions between 42,600pts-42,730pts. Daily and hourly momentum indicators are already in bearish mode on short term basis if index would slide below 42,000pts then a weekly bearish engulfing patter would take place which create more panic and uncertainty among investors.

Asian shares looked set to rise on Friday following pledges by central bankers globally to do whatever it takes to support the economic recovery while oil perked up as OPEC threatened to clamp down on member states that did not cut output.Australian S&P/ASX 200 futures rose 0.29% in early trading. Japan’s Nikkei 225 futures added 0.09%, while Hong Kong’s Hang Seng index futures rose 0.37%. E-mini futures for the S&P 500 rose 0.04%. The Bank of England said on Thursday it was considering negative interest rates as the UK economy faces rising COVID-19 cases, higher unemployment and a possible new Brexit shock. It also kept its main stimulus programs on hold, citing a faster-than-expected economic recovery from pandemic lows. “Delivering net economic stimulus this way absolutely can be done,” said Sharon Zollner, chief economist at ANZ, said of negative interest rates, which New Zealand’s central bank is also considering.Read More...

State Bank of Pakistan will announce its bi-monthly monetary policy here on Monday after detailed meeting of its monetary policy committee who will decide about new policy with discount (interest) rate as its main feature. At present, the policy rate is 7 per cent. SBP Governor Dr Reza Baqir will unveil the policy statement at a press conference at SBP Main Building, said SBP alert to media. For managing the critical economic situation in the country created after outbreak of COVID-19 pandemic, from February 2020, the Central Bank reduced its policy rate five times to 7 per cent from 13.25 per cent. This helped industries and businesses to restart its activities. The policy rate is the primary instrument of monetary policy statement. Read More...

The imports of plastic materials witnessed increase of 11.20 per cent during the first month of current financial year 2020-21, as compared to the imports of last year. Pakistan imported plastic materials of worth $175.801 million during July 2020 as compared to the imports of $158.089 million during July 2019, showing growth of 11.20 per cent, according to the Pakistan Bureau of Statistics. In term of quantity, Pakistan imported 150,154 metric tonnes of plastic materials during the period under review as compared to the imports of 116,121 metric tonnes during corresponding period of last year, showing increase of 29.31 per cent in term of quantity. On month-on-month basis, the plastic materials imports also increased by 14.86 per cent during July 2020 as compared to the imports of $153.059 million in June 2020, the PBS data revealed.Read More...

The Economic Coordination Committee (ECC) of the Cabinet has decided that Trading Corporation of Pakistan (TCP) will start importing wheat in the required quantities through small tenders from time to time to maintain the wheat supply at a reasonable price and for keeping additional strategic reserves. Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet here at the Cabinet Division. ECC discussed in detail the need to import wheat in the country through the government and private sector. The Chair directed that the availability of wheat is an important issue and there is a need to maintain sufficient stock of wheat in the country which could be made available at a reasonable price. Read More...

Senate Standing Committee on Industries and Production on Thursday once again expressed displeasure over the production of substandard cars in the country despite their high prices. Senate Standing Committee on Industries and Production, which met under the chair of Senator Ahmed Khan, discussed the issue of rising car prices in the country. The committee members expressed concerns over the reply submitted by the Ministry of Industries and Production. The committee members noted that vehicle companies are charging high prices from the consumers and providing substandard cars to the consumers.Read More...