KARACHI: Stock market staged a grand rally on Tuesday with shares across the board posting gains in the lead of the banking sector. The KSE-100 index opened in the positive and marched forward all through the session without once going in the red.
After hitting intra-day high by 503 points, the index closed the session on stellar gains of 386.08 points (1.13 per cent) at 34,408.
Investors set the grim speculations about the federal budget aside and were relieved by further relaxation in lockdowns, mainly the transportation. Trading in commercial banking stocks was brisk with volumes scaling over 50 million shares and the sector contributing 332 points to the index upsurge.
Interest in the banks was sparked by reports circulating in the market regarding the reduction of Capital Gains Tax. It was further fuelled by the annual average inflation for FY20 which worked out in excess of 10pc, diminishing the prospects of further interest rate cut in the next monetary policy statement.
Besides, the gradual increase in the secondary market Pakistan Investment Bond yields since last month provided confidence to the investors who had also picked up banking stocks on Monday.
Foreigners took the opportunity to offload shares worth $9.50m, but those were quickly picked up by local corporates and mutual funds. The volume rose 12pc to 221m shares while the traded value increased 19pc to $52m. Leading contributors included Pak Elektron, TRG, Hascol Petroleum, Bank of Punjab, Unity Foods and National Bank.
Sectors contributing to the positive performance included banks, surging by 332 points, exploration and production 38 points, autos 13 points while fertiliser, declining by 22 points, pharma 18 points and investment banks 14 points shaved off some of the gains.
Among scrips, United Bank and Bank Alfalah closed at the upper circuit. Moreover, in the E&Ps, Pakistan Oilfields was up 3.1pc and Pakistan Petroleum 0.8pc closed in the green trajectory. Cement stocks also showed some signs of revival but remained range-bound.
Published in Dawn, June 3rd, 2020