Recovery in global markets and positive macro numbers contributed to the gains.
The stock market sustained its positive momentum as increasing crude oil prices helped the benchmark-100 index climb 873 points (2.6%) during the week ended October 9.
The oil and gas sector was the primary driver of growth as crude oil prices jumped more than 5% during the week. A recovery in global stock markets and positive macroeconomic data also contributed to the optimism at the bourse.
The week started off on a negative note as crude oil prices dipped early in the week as news about a continued supply glut circulated in the market. The Karachi Stock Exchange (KSE)-100 index fell 185 points on Monday as volatility prevailed.
Things turned around the following day and Monday proved to be the lone negative closing throughout the week. A rebound in oil prices along with positive news on the macroeconomic end saw the index rise 1,058 points in the final four days of the week to close at 33,843 on Friday.
Oil prices dominated proceedings at the bourse throughout the week with WTI Crude prices crossing the $50-per-barrel psychological barrier for the first time since July during the week. Prices dipped mid-week after the announcement of US oil inventory numbers, but rose again after OPEC announced that it expects demand to pick up due to lower oil prices moving forwards.
The heavyweight oil and gas exploration sector, which had received a battering in recent months responded to the news and rose 8.6% during the week. The Oil and Gas Development Company and Pakistan Petroleum Limited alone contributed 211 points to the KSE-100’s gains during the week.
During the week, it was also revealed that the US Fed had postponed hiking interest rates due to the state of the global economy. The news created optimism in global markets that the US would take necessary steps to maintain balance in the global economy and as a result, markets all over the world responded positively, with Pakistan being no exception.
The cement and steel manufacturing sectors also witnessed decent gains during the week with the China Pakistan Economic Corridor (CPEC) expected to provide a boost to both sectors in the coming months. The cement sector was up 4.3% while the steel sector also rose 5.9% during the week.
The direction of foreign flows was the only blip as foreigners were net sellers at the bourse, offloading $19.3 million worth of net equity during the week as opposed to the $0.22 million net buying in the previous week.
Average daily volumes were marginally down by 1.7% and stood at 175 million shares traded per day. However, average daily values picked up 20.1% and were recorded at Rs9.57 billion per day. The KSE’s market capitalisation stood at Rs7.23 trillion ($68.3 billion) at the end of the week.
Published in The Express Tribune, October 11th, 2015.
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