KARACHI, Oct 10: The stock market has witnessed a tangible change in the investors’ outlook on future share business, as indicated by the confidence with which they have injected billions of rupees in the blue chips ruling at new lows.

An increase of about Rs12 billion in the market capitalization in about a week shows that stocks at the attractively lower levels have again assumed the role of a bait for moneyed people and sustained the inflow of massive amounts.

“The fall of Rs200 per 10 grams in the price of gold, continued weakness of the dollar against the rupee, which has shed another 1.5 per cent, indicate that the funds are making a fresh debut in the share business”, stock analysts at the W.E. Financial Services say.

With slump in property business, options for investments have narrowed down. Investors with liquid cash may also start having a fresh look at the share market. A weak dollar is making the greenback unattractive as a store for value.

Stock analysts at AHRA say a five per cent increase in the KSE 100-share index in war-like situation is no small an achievement, as it reflects that investors are not inclined to miss the lead given by the foreign investors.

The revival of foreign fund operations after a long absence may be one of the stimulating factors behind the market’s current run-up. The daily trading volumes show that huge amount of money is again flowing into the share business.

“Psychological depressants such as the Afghan war, local civil unrest and its negative impact on industrial productivity and exports may take their toll in purely technical terms, the near-term outlook appears bullish.

After a long absence, the revival of foreign buying shored up the shaky confidence of local investors. There was essentially some rethinking on the future economic outlook, reopening of the foreign credit lines, lifting of economic sanctions and feelers of write-off of massive foreign debt of $32bn and fresh loans. The outlook on the external sector appears to be positive.