Stocks stage 474-point rally on budget eve
KARACHI: Bulls returned with a vengeance on Thursday, tossing the KSE-100 index up by 474 points, or 0.99 per cent, over the psychological resistance of 48,000 points.
The index closed near its intraday high at 48,252 points which was 510 points above its previous day’s close. Investors scurried to buy stocks that had dropped to attractive levels after previous two-day aggregate decline of around 500 points. But the major support came from positive news flow in regard to the Federal Budget 2021-22 to be unveiled by the finance minister on Friday. Among participants, mutual funds and brokers were major buyers while foreign investors and individuals booked profit.
The endorsement of proposals by the Securities and Exchange Commission of Pakistan for growth of the capital market was thought to be timely. Reports of remittances exceeding $2bn for the 12th straight month was encouraging as it also suggested greater inflow into the market through Roshan Digital Account. The finance minister’s stress on ‘inclusive and sustainable’ growth and hint of a major relief to public and private sector to breathe life into the pandemic-hit economy, in his brief on the launch of the Economic Survey 2020-21 also helped build sentiments.
Market gurus were unanimous in their belief that the sectors relating to construction, technology & communication and commercial banks would receive priority in incentives. Technology and communication sector was thought to benefit from cut in taxation in the budget. The share in TRG climbed to close near its upper circuit.
Stocks that contributed heavily to the index rise included TRG (128 points), Unity (36 points), HBL (32 points), UBL (25 points) and Systems Ltd (24 points).
Fertiliser, vanaspati and textile sectors also saw jump in their stock values. From the fertiliser sector, AHCL, EFERT, Engro Corp and FFC closed higher.
The trading volume retreated 23pc over the previous day to 1.04bn shares where major contribution came in from low-priced stocks: WTL, KEL, UNITY, PACE and PTC.
Published in Dawn, June 11th, 2021