However, it was not clear whether the improvement could be carried out to the next week’s trading sessions as political uncertainty continued to be one of the dominating factors leading to negative impact on the market for the last couple of weeks.
The pre-election weeks could be crucial for the market as well as for investors as re-election of the president possibly by the next month by the sitting assemblies could work both ways of the underlying sentiment, said a leading broker.
That is, perhaps, why investors are not putting money in stocks as they are not sure about the future outlook and are mostly indulging in intra-day trading, he added.
Earlier in the week, stocks received another massive battering for the third week in a row on panic foreign selling triggered by rumours of imposition of emergency and the situation prevailing on the political horizon.
It was a terribly disturbing week for stakeholders as the KSE 100-share index on Monday and Thursday plunged by 6.12 per cent or 756.63 points eroding Rs200 billion from the market capital. It finally fell 644.67 points or seven per cent to close at 12,053.37.The free float 30-share index shed 728.28 points at 14,419.94. Indications are there that it may fall further as the fight between the contenders of power to get an upper hand is expected to intensify.
Although investors could not precisely decide how to react to the possible return of Sharif brothers to Pakistan, indications are there that political polarisation could work on both sides of the market. However, many think the sailing on the share market may not be that smooth in the election year.
Even the most optimists of the leading analysts are tight lipped over the future direction of the market in the developing political situation.
What worried analysts the most was that foreign investors may not return soon to the market as most of them had already unloaded their long positions on the banking and oil counters at declining prices, brokers said.
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“The entire trading appears to be a jobbing affair”, said a leading analyst Ahsan Mehanti adding “investors covered positions at the early lows and bailed out after selling at the intra-day highs on modest profit margins”.
His comment is also reinforced by the KSE 100-share index, which earlier rose amid highly erratic movements, lifting the prices of leading shares sharply higher but it ended extremely lower on panic selling.
Fresh heavy selling in PTCL, Bank Alfalah and some other leading base shares, pulled it down from the session’s high of 12,806.01 to close lower but well above the lowest of the day.
“In the absence of leading financial institutions and foreign investors, locals are playing safe and are not inclined to go beyond certain limits of financial risks and that has taken steam out of the market,” analyst Hasnain Asghar Ali said adding “the trading will remain insipid until political irritants are there”.
Leading analysts believe the current lower levels attained by most of the liquid shares ensure higher capital gains, but who will bell the cat is a question being debated in a loud whisper, said a leading broker.
In the prevailing political situation and in the absence of market trend-setters, it appears difficult to talk of a turnaround at this stage. But the market could regain its lost glory on the strength of higher corporate results depending on national reconciliation on political front, some others said.
FORWARD COUNTER: leading shares on the cleared list also suffered sharp fall and finished sharply lower under the lead of MCB, OGDC, National Bank, Bank Alfalah, Lucky Cement, and many others, although some of them showed smart recoveries at the weekend session.
National Bank, OGDC, Lucky Cement and some other recovered from the early week lower levels on active support.
—Muhammad Aslam