KARACHI: Stocks staged a robust rally on Tuesday with the KSE-100 index accumulating gains of 1,096.17 points (2.63 per cent) to close at 42,744.82, which in percentage terms marked the highest single day upside in 2018.

The massive recovery after the index decline of 8pc in the current month until Monday was underpinned by value hunters taking a plunge to mop up blue-chip scrips that had fallen to highly attractive valuations.

International oil prices, holding on to their strongest three-and-a-half-years and the positive movement on the political front with the government and opposition entering into discussions over the caretaker set-up - which investors hoped would lead to timely elections - also buoyed sentiments. Over the last weekend, many investment strategists were predicting a rally, based on the historical average gain of 14pc provided by the market during the caretaker set-ups.

While the index settling close to the day’s highest suggested the rally could extend to the upcoming sessions, the investor enthusiasm was cooled off a bit after National Clearing Company of Pakistan figures showed heavy foreign selling of net $11.83 million.

Exploration and production sector, higher by 3.1pc, led the early gains as crude oil prices remained near their strongest levels in three-and-a-half-years. Later on, other key sectors including steel, increasing by 4.9pc, fertiliser 4.4pc, cement 2.9pc, banks 2.2pc joined the rally. On the fertiliser front, Fauji Fertiliser and Fauji Fertiliser Bin Qasim and in the cement sector, Cherat Cement and Pioneer Cement closed at their upper limits. Among banks, Habib Bank, rising by 1.99pc, United Bank 2.21pc, Allied Bank 2.47pc and MCB Bank 1.22pc were the lead gainers.

Stocks making major contribution to the index inclu­ded Engro Corporation, up 4.80pc, Pakistan Petroleum 3.67pc, Pakistan Oilfields 4.95pc, Hub Power 4.66pc and Fauji Fertiliser 4.46pc, adding 346 points.

Published in Dawn, May 23rd, 2018