KARACHI: Stocks snapped the three-day losing streak on Friday with the KSE-100 index managing to recover 574.03 points (1.51 per cent) and settle at 38,585.66.

The market started out on a mixed note and traded sideways but reports of the State Bank of Pakistan (SBP) receiving second tranche of $1 billion aid from Saudi Arabia provided the much needed boost to investor confidence.

Together with that, the Asian Development Bank was reported to have provided $284 million for power transmission network, while also proposing a $7.5bn lending programme for the next three years, allocating its one-third for budgetary support to the government.

All the negative news was discounted by the market. The drop in SBP reserves by 3.22pc to $7.3bn and Fitch Ratings downgrading Pakistan’s default rating to B- from B failed to cause a stir amongst investors.

Moody’s long-term outlook for the country remaining “robust” overshadowed them hinting at the possibility of lowering external credit rating. Investors who set their eyes on the attractive valuations of blue-chip scrips went on a buying spree, which carried the index all the way up to intraday high by 600 points.

Contrary to general perceptions of a halt in foreign sell-off, figures released by the National Clearing Company of Pakistan showed that there was no let-up in foreign outflows, which amounted to $2.56m.

Commercial banks, energy and fertilisers were the major movers where Engro Corporation, up 4.1pc, Pakistan Petroleum 2.8pc, United Bank 2.7pc, Habib Bank 2pc, Pakistan State Oil 3pc, Hub Power 2.3pc, Pakistan Oilfields 0.9pc and Fauji Fertiliser 1.1pc cumulatively contributed 292 points to the index.

Going forward, most analysts reckoned the market to remain volatile, suggesting caution in taking fresh positions.

Published in Dawn, December 15th, 2018