KARACHI: Stocks sta­ged a grand rally on Monday on the back of buying in banking scrips. The KSE-100 index closed the session with gains of 613.54 points (1.63 per cent) at 38,221.16.

Shares in banks sold like hot cakes right from the start of trading mainly as the SBP announced its decision not to hold a monetary policy meeting until September as the interest rate had been streamlined through a series of cuts in the aggregate 625 basis points during the previous months.

It encouraged investors to go long on stocks since the SBP gesture was considered as a sign that the policy rates had bottomed out. They developed an appetite for banks also as they started to anticipate better than-expected financial results. HBL, which had released healthy profits last Friday, led the sector’s march north. Another big player, UBL, would unveil its numbers in the first week of August. Meezan, Al Habib also closed in the green.

As buying intensified across, the index hit intraday high by 684 points. Late comers jumped on the bandwagon midday as the benchmark was still 11pc below its January high and expectations grew of further softening of the lockdown with active Covid-19 cases down to just 30,000, defying Federal Minister Asad Umer’s dire projection a month ago of 12m active cases by the end of July.

Most automobile shares gained values and followed Millat Tractors which stopped short of hitting its upper circuit as the government approved the subsidy on tractors. Cement sector gained to close higher where DG Khan, Lucky, Kohat, Cherat, Pioneer and Maple Leaf were major movers of the day.

Foreigners sold shares worth $3.25 million which were picked up mainly by high net worth individuals. Going forward, the market trend would be set by investors with an eye on the future rollover week.

Published in Dawn, July 28th, 2020