KARACHI: In the outgoing week, the stock market took further strides, building on the momentum gained from the previous two weeks. The KSE-100 index added 1,448 points (3.6 per cent) to settle at nine-week high 42,004 points.

From the depth of despair until Oct 16, when worries over the economic crisis loomed large, the index launched a spectacular rally following the offer of $6 billion financial assistance package by Saudi Arabia. In the last eight consecutive sessions, index has gained 12pc.

Fearing not to miss out, investors continued to mop up stocks in anticipation of an aid package from China, which was thought to be as generous as the one offered by Saudi Arabia. As greed overpowered fear, investors continued to take fresh positions, regardless of the political turmoil in the country over a Supreme Court judgement in case of blasphemy.

Investors’ focus remained on prime minister’s negotiations with Beijing, believing that a tidy aid package could limit the sum required to be borrowed from the Inter­national Monetary Fund and on less stringent conditions.

With the increase in investor participation, the daily average volume surged 7pc to 64-week high of 322 million shares while average traded value jumped 26pc to $95m.

Leaders were bank of Punjab with 155.5m shares; K-Electric 101.06m, Pak Elektron 83.88m, Lotte Chemical 79.3m and Pak­istan International Bulk Terminal 79.27m.

During the week, foreign investors sold stocks worth $12.6m, in addition to outflow of $399.77m in CY18. Foreign sell-off was witnessed in exploration and production at $7.1m and commercial banks $4.5m. On the domestic front, major buying of equity worth $20.6m was reported by individuals while insurance companies bought stocks of $4.7m. Mutual Funds joined foreigners with net sale of $10m.

Major drivers of the market were commercial banks and cement, which together added 811 points. Automobiles gained 5pc, recovering their previous week’s oversold positions. Pharmaceuticals also outperformed the benchmark index with gains of 133 points on anticipation of higher CPI numbers this month, given that medicine price increase was linked to inflation levels. On the flip side, exploration and production chipped away 174 points as global crude oil prices declined by 6pc over the preceding week.

Sector-wise contribution was led by commercial banks, higher by 482 points, cement 329 points, power generation and distribution 135 points, pharmaceuticals 133 points, and oil and gas marketing companies 117 points.

Whereas, negative contributions came primarily from oil and gas exploration companies, decreasing by 174 points due to declining international oil prices.

Scrip-wise leading gainers were Habib Bank, up 11.66pc, Hub Power 9.31pc and Searle Company 25.74pc, adding 463 points to the index.

For the upcoming week, announcement of the financial package from China could give further fillip to the stock prices.

Mean­while, negotiations with the IMF for a possible bailout package would also start and the news flow about the progress is likely to set the direction of the market.

Published in Dawn, November 4th, 2018