KARACHI: The seven-day losing streak at the stock market came to a screeching halt on Tuesday as the KSE-100 index showed a massive surprise recovery by 457 points, or 1 per cent, to settle at 45,275.
The index wrestled between a high and low of 120 and 71 points early in the session. However, it gathered steam before the close of trading and made an intraday high by 477 points. The index receded a little on profit-taking before the close. Market watchers thought it was difficult to justify the massive surge, particularly in the absence of any major positive trigger. But some argued that the over-sold stocks that were available at attractive valuations, were picked up by investors who were encouraged by the settlement of future positions.
Reports suggested that the finance minister had assured of Pakistan’s commitment to the IMF programme and to take relief measures to curtail inflationary pressure on basic food items. Market was thought to have reacted positively to the statement.
But for all that many in the market remained unconvinced that the bulls could so easily drive away the bears who had been in charge for over a week. On the contrary, during the day, the rupee recorded its lowest ever value against the dollar in interbank. Some suggested that the relentless rise of the market looked like the ‘dead cat bounce’ phenomenon. They recommended sell on rallies and buy on dips until the market shows a sustainable trend.
Foreign investors dumped stocks worth $6.25m. Among local participants, companies, mutual funds and brokers continued to offload. The major index contributor to index rise was the technology sector where heavyweights, AVN, Telecard and Netsol hit their upper circuits while TRG also made ample gains. Other bullish sectors were refinery and OMC, fertilisers and textiles. On the E&P sector, Pakistan Oilfields gained while OGDC and PPL continued to trend in the red. Stocks that contributed positively to the index include TRG (126 points), MEBL (36 points), POL (33 points), System (26 points) and Unity Foods (24 points).
Published in Dawn, September 29th, 2021