KARACHI: The stock market managed to eke out just 20.34 points (0.05 per cent) on Thursday when the KSE-100 index settled at 42,047.72.

The market opened in the green as it extended the spectacular rally into the fourth day. The index sauntered along and reached intra-day high by 385 points. Including the 620 points lead last week, it meant an addition of 2,224 points or 5pc in almost as many days.

The thought gave investors goosebumps who started to fear that the market or at least some sectors may have been overbought. Other negatives that stockholders had put on the back burner also started to haut.

On the economic front, rating agency Fitch gave out a gloomy prognosis of Pakistan’s real GDP growth for FY2020-21, which already expected at a meagre 0.8pc was thought to see a further downside as the second wave of the Covid-19 dampens hopes of recoveries in private consumption and investment inflows. The country is reporting 3,499 daily Covid-19 cases with positivity rate of 8.16pc.

It dawned upon investors that by mid December when the opposition holds another show of power with thousands of protesters converging at a point, it could lead to fuel the number of new Covid-19 cases. The State Bank of Pakistan noted that the country’s foreign ex­­change reserves decreased during the past week by $303 million to $20.2 billion.

Although international oil prices showed signs of moving up, the crucial meeting of OPEC+ ministers’ meeting on extension of supply cuts were the determining factor for the energy sector.

All of that led to profit taking which intensified later in the day with investors reducing their positions across the sectors. The price flare up seen earlier in the day in the auto assemblers; pharmaceuticals, cement and power started to wither away.

Foreign investors who had been major sellers for the last many days swooped to pick up equities available at bargain prices after the carnage. Foreign inflows stood at $6.58m.

Among local participants, companies dumped stocks worth at a huge $12m. Among scrips, the selling pressure mainly came from Habib Bank Ltd, Fauji Fertiliser Company (FFC) and Oil and Gas Development Company while Systems Ltd, Lucky Cement, MCB Bank and FFC closed lightly in the green.

Published in Dawn, December 4th, 2020