KARACHI: The stock market snapped four-day losing streak on Thursday as the bulls appeared out of nowhere to toss the KSE-100 index up by 805 points, or 1.70 per cent, to close at 48,053 points. Traders and analysts fumbled for reasons to justify the massive rebound.

Market participants attributed the sudden surge of investors’ interest in equities to the decline in oil prices in the international market; Chinese Foreign Ministry’s spokesperson Zhao Lijian positive talk at the Gwadar Port and the government having raised Rs146bn through the PIBs auction where yield remained unchanged.

The developing situation in Afghanistan and the increase in Covid-19 cases for the first time in a week, were set aside. While those positives advanced by market gurus were convincing in varying degrees, the one major reason was the massive buying by mutual funds of stocks worth $12.7m. A fund manager said that “a leading state-owned pension fund” had invested huge idle sums in mutual funds.

Brokerage Arif Habib Ltd stated in their report: “Conversion of fixed income funds to equities from institutional investors played a vital role in today’s index uptick”. The executive director Next Capital Zulqarnain Khan said that the market was flush with liquidity. Since the market had taken a major dip in the previous four days, “big corporations with tons of cash entered the stock market through mutual funds,” he reckoned. Individuals who had been taking losses, seized the opportunity to take an exit at their buying price and sold shares valued at $9.29m.

Traders said that the recovery in international oil prices and recently announced price hike by cements, steels and fertiliser sector also reignited interest in key sectors.

Sectors contributing to the performance include technology (163 points), cement (144 points), banks (107 points), fertiliser (87 points) and power (51 points).

Stocks that were leading gainers included TRG (121 points), Lucky Cement (79 points), Hub Power Co (40 points), Systems Ltd (35 points) and Engro (31 points). The traded volume rose 15pc over the previous day to 475.2m shares while the traded value surged 43pc to $133.8m.

The trend of the market on the last trading day on Friday would show if the rally would gather steam or Thursday’s upsurge was merely a “dead cat bounce’’.

Published in Dawn, July 9th, 2021

Opinion

The risk of escalation

The risk of escalation

The silence of the US and some other Western countries over the raid on the Iranian consulate has only provided impunity to the Zionist state.

Editorial

Saudi FM’s visit
Updated 17 Apr, 2024

Saudi FM’s visit

The government of Shehbaz Sharif will have to manage a delicate balancing act with Pakistan’s traditional Saudi allies and its Iranian neighbours.
Dharna inquiry
17 Apr, 2024

Dharna inquiry

THE Supreme Court-sanctioned inquiry into the infamous Faizabad dharna of 2017 has turned out to be a damp squib. A...
Future energy
17 Apr, 2024

Future energy

PRIME MINISTER Shehbaz Sharif’s recent directive to the energy sector to curtail Pakistan’s staggering $27bn oil...
Tough talks
Updated 16 Apr, 2024

Tough talks

The key to unlocking fresh IMF funds lies in convincing the lender that Pakistan is now ready to undertake real reforms.
Caught unawares
Updated 16 Apr, 2024

Caught unawares

The government must prioritise the upgrading of infrastructure to withstand extreme weather.
Going off track
16 Apr, 2024

Going off track

LIKE many other state-owned enterprises in the country, Pakistan Railways is unable to deliver, while haemorrhaging...