KARACHI: After a massive rout of 1,335 points a day ago, the KSE-100 index recovered 442.27 points (1.13 per cent) on Tuesday and closed slightly short of the intraday high at 39,602.87.
In early trading, nervous investors extended the previous day’s decline and the index sank another 271 points. But developments such as prime minister’s assertion that the government had asked the State Bank to share information before deciding on major rupee devaluation and finance minister reiterating there was no economic crisis and the financing gap for the current fiscal was already met, helped to calm the market.
Besides, the consumer price index for Nov’18 coming at 6.5pc below street expectations of 7.27pc, increase in cement price by Rs10 per bag to cover the rupee devaluation, strong bouts of buying in banking sector after higher than expected policy rate rise; and overall attractive valuation of market after the price erosions enticed investors to go for value hunting. The index emerged from the red and climbed all the way to intraday high by 497 points.
Sectors that contributed to the upsurge included banks, exploration and production, power and fertiliser. Trading activity in Lucky Cement and United Bank (MSCI EM ousted stocks) reflected that foreign investors who wanted to sell the two stocks had found the exit.
Foreign selling amounted to $3.59m and rising international oil prices kept E&P shares in demand. Traded volume rose 19pc to 196m shares while traded value jumped 70pc to Rs11.2bn.
Major gainers were Hub Power, up 4.38pc, Habib Bank 2.75pc, MCB 3.15pc, Oil and Gas Development Company 2.37pc and Pakistan Petroleum 2.23pc, adding 263 points. On the flip side, Pakistan State Oil, down 2.79pc, Lucky Cement 1.43pc and Maple Leaf Cement 4.72pc took away 57 points.
Published in Dawn, December 5th, 2018