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 theMinistry 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 unance 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, cutoff yields of recently held T-bill auctions remained lower compared to the secondary market in three-, sixand 12-month tenors, respectively.

Moreover, participants decided against building long positions prior to the Eid holidays.

Foreign offloading came in at $8.77m compared to a net sell of $10.91m the earlier week. Selling was witnessed in oil and gas marketing companies at $2.36m, banks $2.11m and fertiliser $1.69m. On the domestic front, individual accumulated stocks worth$11.37m while buying by insurance companies arrived at $4.94m. Average volume dechned 7pc over the preceding week to 205m shares while the mean value traded increased 20pc to $47.5m.

Sector-wise negative contributions came f rom commercial banks, higher by 162 points, fertiliser 114 points and cement 95 points. Scrip-wise major laggards were Engro Corporation, down 52 points, Fauji Fertiliser 43 points and MCB 36 points. Top gainers were oil and gas, food and personal care companies.

Going forward, strategists at brokerage Arif Habib mentioned the provisional estimates of the NationalAccounts Committee suggested slowdown in GDP at a negative 0.4pc during the ongoing year.

Although investors struggle to find silver linings at present, expectadonsofareboundnext year (IMF forecasts growth at 2pc in FY21) marks the upcoming budget a key event.

Analysts said the commencement of economic activity amid ease in lockdown as well growth boosting budgetary measures could potentially reinvigorate the market momentum post Eid break.