After a week of uncertainty, bulls once again showed their horns on the trading floor of the Pakistan Stock Exchange on Friday.

According to the PSX website, the benchmark index closed at 66,130.02 points, up by 1.04 per cent or 679.84 from the previous close of 65,450.18 points.

On Wednesday, stocks tumbled by 1,147 points as fertiliser, technology, banking and exploration and production sectors received considerable selling headwinds.

The market recovered today after shares of Treet Battery Ltd began trading following the bifurcation of the battery division of First Treet Manufacturing Modaraba (FTMM) through a court-sanctioned scheme of arrangement.

Yousuf M. Farooq, director of research at Chase Securities, said the stock market was simply “rerating upwards”.

He attributed the upward momentum of the index to a more balanced current account — which has reduced fears of currency devaluation — in addition to cheap valuations, that led to continued foreign interest.

Farooq further highlighted the positive aspects of growth in exports, agriculture, and fiscal prudence by the government in the first quarter of the year.

He explained that over the past 5 years, earnings for most sectors kept growing — at least in rupee terms — while stock prices continued to rerate downwards on the expectation that earnings would drop.

“But earnings never dropped and we were left with a very cheap market with solid earnings,” Farooq added.

Shahbaz Ashraf, chief investment officer at FRIM Ventures, attributed the rally to the equity market trading at cheap valuations, in addition to excessive liquidity being available.

Moreover, he highlighted that the general consensus showed that the economy was set to recover in the following months, noting that the market had once again gained 1.2pc.