On Wednesday, the KSE-100 Index experienced a significant decline, snapping a three-day winning streak. The index concluded with a loss of 466 points in first hour of trading session, settling at 75,517 points. This downturn came amid several influencing factors, including a modest rebound in the US Dollar and hawkish comments from Federal Reserve officials.
Key Market Insights
- Opening and Volatility:
- The index opened positively but remained volatile throughout the trading session.
- It posted a high of 204 points and a low of 497 points before closing with a substantial loss.
- Trading volumes were lower compared to the previous session.
- Technical Indicators:
- The index is currently 26.4% above its 200-period moving average, indicating an upward trend.
- Volatility levels are normal when compared to the average of the last ten trading sessions.
- Despite bullish trend forecasting oscillators, the momentum oscillator signals an overbought condition.
- Support and Resistance Levels:
- Support: Initial support is expected near 75,500 points. A breach below this level could see further declines towards 75,100 and 74,700 points.
- Resistance: On the upside, the index might face resistance near 76,200 points initially, with subsequent resistance at 76,600 and 76,900 points.
- Traders are advised to adopt a cautious approach, accumulating positions near support zones with a defined risk below 75,000 points.
NOTABLE MARKET MOVEMENTS AND RECOMMENDATIONS
- Banking Sector: Mixed performance was observed with notable recommendations:
- Buy: UBL at 220.00 with a target of 229.00.
- Sell: MCB at 206.70, HBL at 115.78.
- Oil & Gas Exploration: Predominantly bearish outlook:
- Sell: OGDC at 136.98, PPL at 121.23.
- Cement Sector: A downward trend with several sell recommendations:
- Sell: LUCK at 887.96, DGKC at 85.70.
- Technology & Communication: Mixed signals:
- Buy: HUMNL at 12.50.
- Sell: TRG at 63.20, AVN at 56.33.
ECONOMIC INDICATORS AND GLOBAL INFLUENCES
The decline in KSE-100 aligns with global economic trends and market sentiment influenced by:
- Federal Reserve Policies: Hawkish comments and stronger-than-expected US economic data have diminished expectations of a rate cut in September, strengthening the USD and affecting USD-denominated assets like gold.
- Geopolitical Tensions: Ongoing geopolitical uncertainties continue to impact market dynamics, contributing to volatility.
UPCOMING ECONOMIC EVENTS
Market participants should closely monitor upcoming events, which could influence future movements:
- Fed’s Beige Book and John Williams’ Speech: Insights into economic conditions and monetary policy.
- US Core PCE Price Index Release: Expected to show an increase, indicating potential inflationary pressures.
DISCLAIMER
Our content is intended to be used and must be used for informational purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances.
