Mutual funds lead 570-point rally on PSX
KARACHI: The raging bull again took the market by storm on Wednesday, tossing the KSE-100 index high into the air by 570 points (1.41 per cent) with closing seen at 40,862.59.
Intraday, the index touched 602 points. The bullish rally extended momentum generated the previous day when the benchmark had gained 490 points and crossed 40,000 hurdle. Market capitalisation increased by Rs70 billion with the two-day addition to PSX value rising by Rs159bn.
Investors seemed to be excited over the rebound in economy post Covid-19 and the current account surplus in July. The rally was triggered by foreigners who bought shares worth $1.02 million which encouraged participants to believe that the months of outflow were finally plugged and Pakistan had started to appear on the foreign fund managers’ radar.
Among locals, mutual funds were major buyers of equity in the huge sum of $10.40m, which a manager attributed to shuffling of funds from money market to equity.
Index-heavy commercial banks and exploration and production were the key gainers. Activity in the former was attributed by an analyst at Arif Habib Ltd to expectations of higher CPI, scheduled next week, and the monetary policy next month. Cement, steel and industrials remained under selling pressure. Pharmaceuticals and automobile also succumbed to profit-taking.
Muhammad Arbash, Senior Manager Sales at Topline Securities, noted: “Smooth operations on the rollover week continued where future open position of August contract declined by Rs1.66bn to Rs9.64bn as of Tuesday”.
The volume stood at 508m shares, up 5pc over the previous day while traded value rose 6pc to $128m. Sectors that contributed the highest points to the index included banks, fertilisers, textile and power. Top gaining scrips were Habib Bank, MCB, United Bank, Pakistan Oilfields and Engro Corp.
Published in Dawn, August 27th, 2020
