Stocks bounce back with 722-point rally

Updated 08 Oct 2020

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Stocks staged a spectacular rally on Wednesday with the KSE-100 index rebounding after several bleak sessions to close at 39,849.96, representing hefty gains of 722.48 points (1.85 per cent). — Dawn/File
Stocks staged a spectacular rally on Wednesday with the KSE-100 index rebounding after several bleak sessions to close at 39,849.96, representing hefty gains of 722.48 points (1.85 per cent). — Dawn/File

KARACHI: Stocks staged a spectacular rally on Wednesday with the KSE-100 index rebounding after several bleak sessions to close at 39,849.96, representing hefty gains of 722.48 points (1.85 per cent).

Market capitalisation recovered Rs121bn. Trading started on a positive and the index climbed to intraday high by 793 points.

The significant feature was the end of selling by individuals which had mainly dragged the market down in the last few days. Raza Jafri, head of Equities at Intermarket Securities, said that after the recent decline of 10pc, the correction may have been done leading to a rebound in share values.

Leveraged Individuals gross buying and selling squared up on Wednesday, while broker proprietary trading represented major buying of $1.53m, that wiped out mainly minor selling by foreign investors and individuals.

Other than that, investors’ sentiments were boosted by the SECP chairman confirming that all the conditions of Financial Action Task Force were largely met and there was no pending regulatory requirement.

Traders also attributed rebound in the index to adjustment/settlement of capital gains tax lately demanded by National Clearing Company from investors which had negative impact on sentiments.

Buying activity was observed across the board but mainly in the cement sector where DG Khan, Pioneer and Lucky were among gainers. In banking, National closed down 3.5pc as the Finance Division directed federal government ministries, divisions, attached departments and subordinate offices to transfer funds from commercial banks/financial institutions to the State Bank under the Treasury Single Account.

The volume increased 6pc over the previous day to 432 million shares while traded value also rose by 9pc to $82.5m. A number of mid-cap stocks like Unity Foods, TRG and Hascol Petroleum traded at and near upper circuits in the later part of the session. Leading gainers were Habib Bank, up 1.1pc, Lucky Cement 2.5pc, Hub Power 1.4pc, Engro Corporation 1.5pc, MCB 1.7pc, and United Bank 1.4pc.

Published in Dawn, October 8th, 2020