KARACHI: Stocks bounced back on Thursday snapping the three-day losing spree. The KSE-100 index climbed 228 points, or 0.5 per cent, and closed at 46,625.

Local participants including companies, mutual funds, insurance companies and brokers started to accumulate shares as the long lingering fears over the downgrade of Pakistan to Frontier Market (FM) from the Emerging Market (EM) were set at rest.

Foreign investors sold shares valuing $5.87m, but there was no major concern in the market over the index reclassification to the FM. As everyone put up a bold face, there were even suggestions of a positive outcome from the development with people repeating that “it did no good for the small fish (PSX) to stay in the big pond” for little over four years.

Traders affirmed that the MSCI’s EM constituents witnessed selling pressure with Lucky Cement and HBL dragging the index down by 42 points and 18 points respectively. Sector-wise, technology, banks, miscellaneous, fertilisers and exploration & production contributed to the market recovery.

Steel and refinery scrips were rare laggards. Cement sector witnessed mixed sentiments where besides Lucky, Cherat closed in the negative while Pioneer in green.

On the other hand, UBL was up 1.4pc, FABL 7.5pc and MEBL 2.5pc. Market watchers said that the yields in the T-bill auction held on Wednesday had remained largely unchanged signalling any rate changes would be too early.

The trading volume decreased 17pc over the earlier day to 396m shares while the value improved to $98.6m from $87.6m. GGL was the volume leader with dealings in 57m shares.

Stocks that contributed positively to the index included PSEL (43 points), TRG (34 points), MEBL (32 points), Systems (28 points) and Engro (24 points).

Stocks that prevented the index from rising higher were Lucky Cement (42 points), HBL (18 points), PAKT (8 points), CHCC (7 points) and PSX (5 points). Going forward, most market experts suggested the buy-on dips strategy.

Published in Dawn, September 10th, 2021