Stocks drop by 2.7 percent due to Covid resurgence

The market has been unable to gain a firm foothold after it slipped from the rec­ent high of 47,000 points. In the outgoing week, the market was held hostage to the flare-up in Covid-19 infection cases that forced the Punjab government to imp­ose lockdowns in some big cities.

As the overall infection remained above 10pc, investors were worried over exte­n­s­ion in lockdowns in other cities including Karachi. They were spooked by a repeat of the Feb 2020 slowdown in production and sales and supplies which would all go down to hurt the corporate bottom-lines in the quarterly results going forward.

On the economic side, the investors also ignored the lower than expected CPI of 9.1pc against consensus expe­c­t­ation of 9.6pc; heavy appreciation of the rupee against the dollar and the record high built-up in foreign exchange reserves. The outgoing week also saw successful issuance of the dollar-denominated Eurobonds in international markets that raised $2.5bn.