KARACHI: On the first day of the opening up of the partial lockdown, the stocks traded range-bound on Thursday with the KSE-100 index finishing off the session again on a flattish note with minor gains of 89.27 points (0.28 per cent) at 31,329.46.

Investors seemed to watch if there was some semblance of start-up of the economic activity, mainly in the incentivised construction industry. The index oscillated between the intraday high and low by 205 and 226 points.

On the economic front, the foreign minister confirmed that the International Monetary Fund had decided to give a one-year relief to Islamabad amid the pandemic. Including the other relaxations and aid packages from the IMF, Asian Development and the World Bank along with inclusion by G20 in their debt relief programme, economists suggested the country might be able to greatly make up for the projected negative GDP growth.

International crude prices fell near an 18-year low, which provided impetus to investors to accumulate the heavyweight exploration and production (E&P) scrips, Oil and Gas Development Company and Pakistan Petroleum.

Start of the result season also provided hopes of earnings improvement in some major sectors such as E&P, fertiliser and banking. Most strategists said those heavyweight sectors which account for 86pc share in the index have the potential to attract investors but the nervous one would be weighing it against the production and profitability losses in much of the second quarter due to the pandemic.

The Pakistan Investment Bonds auction that resulted in normalisation and the downward movement in the yield curve gave good reasons for investors to return to equities. The major development of interest rate cut by another 200 basis points in one go announced by the SBP on Thursday evening would also be a big factor in stock valuations going forward.

Foreigners as usual offloaded stocks but those were picked up by individuals, insurance companies and local corporates. Fertiliser, cement, tobacco and E&P did well while banking generally remained weak.

Published in Dawn, April 17th, 2020