KARACHI: Stocks staged a spectacular rally on Wednesday underpinned by the all-round gains in the energy stocks which encouraged investors to snap up stocks in banking, technology and fertiliser stocks.
The market opened gap up after the pre-open session and the KSE-100 index continued to climb which propelled the index up by 524.18 points (1.29 per cent) to close at 40,377 points, breaking the barrier of 40,000. Intra-day, the benchmark made to a high of 568 points.
The performance of the market in the face of spike in Covid-19 new cases at 3,000 on Tuesday — the highest single day infection since July 9, which threatened to lead to further lockdowns undermining business and industrial activity, surprised most investors. The political activities were expected to intensify in due course. Yet, investors threw caution to the wind.
Zulqarnain Khan, Executive Director at Next Capital argued that there was method in the madness. The Pakistan market had mirrored sentiments in the other Asian, European and US markets which were all flying high.
The Dow Jones Industrial Average vaulted above 30,000, its highest-ever on Tuesday helped by remarkable rise in the WTI crude futures.
The data released by the National Clearing Company Ltd showed heavy foreign sell-off by $2.42 million. Among local participants, institutions and individuals showed no major activity except “broker proprietary trading” which bought shares worth $1.25m.
Traders said the brokers’ buying was mainly to fill vacuum and it went out of the market just as fast as it had come.
Exploration & production stocks led broad market rally with the Oil and Gas Development Company and Pakistan Petroleum Ltd hitting upper circuit. Cements were major laggards as investors avoided taking positions on decline in despatches in the winter season. Instead investors switched to banks, textile and fertilisers.
The technology & communication, autos and refinery sectors followed suit, where Systems Ltd and TRG Pakistan hit their upper circuits. Volumes increased 22pc over the previous day to 213m shares.
Published in Dawn, November 26th, 2020