PRICE movement on the Karachi Stock Exchange last week remained highly erratic as investors played on both sides of the fence in line with the positive and negative news but managed to finish fully recovered from the mid-week lows on strong late buying.
An idea of the market’s uneven behaviour and its response to a combination of good and bad news may well be had from the fact that the KSE 100-share index hit the week’s peak level at 1,425 and the lowest at 1,378.00, breaching the barrier of 1,400 index level both ways.
The war threat by the Indian military high-ups to curb the terrorism across the line of control in Kashmir followed by the panic-selling jolted a perfectly sound stock market at the fag- end of the last week, although the market ended well above the mid-week lows on strong late short-covering.
The KSE 100-share index breached through the psychological barrier of 1,400 points at 1,378 but the late short-covering allowed it to finish at around 1,399.81, slightly below the previous weeks 1,401 and the week’s best level of 1,425.00.
But as the reports of an imminent Indian attack on Pakistan were denied by the Indian defence minister, bulls fought back and drove the bears out of the market at the weekend session. However, the earlier losses could not be fully recouped.
The lifting of economic sanctions and the perception of a robust economy in the months to come, aided by the strong foreign aid doses and the presence of the foreign fund buying allowed the investors to plan for long-term investment strategy and new portfolio line up at the prevailing lower levels.
But the most leading stock brokers think the current run-up is not overdone. Only the market has passed through a needed correction, which they termed a consolidation phase.
A sustained rebound may follow at the lower levels triggered by an expected good dividend announcements from the Hubco and the PTCL.
The strong weekend rally demonstrated in more than one ways that the bulls are not tired and could fight back on positive news from the aid front.
The market talk that both the Hubco and the PTCL whose directors will meet next week could give, in financial terms, a pleasant surprise to their shareholders prompted strong speculative buying in their shares, pushing them substantially higher earlier in the week but the late selling again pushed them modestly lower.
The blue chip sector maintained its upward drive under the lead of the Premier Sugar, Ferozsons Lab — on the follow-up Pakistan and several others.
The traded volume maintained on the higher side, well over 150m shares daily, bulk of which went to the credit of the PTCL, the Hub-Power, the ICI Pakistan, the PSO, Sui Northern Gas, Engro Chemical, Fauji Fertiliser, Adamjee Insurance and the MCB.
Other actives were led by Dewan Salman, Nishat Mills, Japan Power, WorldCall Payphones, Faysal Bank and several others. —Muhammad Aslam.