KARACHI: The slight positivity on the political front translated into giving rise to cautious optimism in the minds of investors. The KSE-100 index bounced back by 361.92 points (0.94 per cent) and closed at 39,054.61.

During February, the index wiped out half of its gains accrued in January with a loss of 4.3pc month-on-month (1,745 points).

Intervention of the international community to diffuse tensions between India and Pakistan together with the prime minister’s gesture to release captured Indian pilot were seen as steps that could lead to dispel fear of full blown conflict. Although traders were not quite sure if the political risks had subsided or the rally was merely a ‘’dead cat bounce’’, investors entered to buy at cheap valuations.

The market opened strong with initial gains of 123 points. As buying continued mainly by institutions, the index climbed and reached intraday high by 456 points. Mid-session, investors were spooked by rumours of skirmishes along the border but the greed quickly got over the fear.

During trading, the index hit intraday low by 134 points. Individuals who were panic sellers the last two days ventured into measured buying with net purchases of $2.32 million whereas mutual funds liquidated positions of $3.18m.

The volume declined 42pc to 159m shares, from 274m while average traded value also declined by 28pc to reach $53m as against $74m. Stocks that contributed significantly included Bank of Punjab, Worldcall Telecom, K-Electric, Pak Elektron and Fauji Cement, which formed 29pc of total turnover.

Major gains, according to Intermarket Securities, were attributable to strong buying sentiment in blue-chip scrips (health care, consumer discretionary, materials and financials).

Top contribution to the index upside came from Dawood Hercules, up 5pc, Oil and Gas Development Company 1.20pc, Habib Bank 1.01pc, Engro Corporation 1pc and Searle Company 3.81pc. On the flip side, Nestle Pakistan, down 3.53pc, took away 14 points.

Published in Dawn, March 1st, 2019