KARACHI: The stock market underwent an unexpected correction as the bulls took the reins, pushing the index up by almost 500 points.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index rose 2.09% or 465.25 points to end at 22,775.85 points.
“In the last 17 months, October 2013 has had the second largest net foreign inflow adjusted for off-market transactions while market return has been dismal 2%. A market where local investors closely track foreign flows, this anomaly was bound to correct,” said Muhammad Raza Panjwani, an analyst at Elixir Securities. He added: “Today probably marked the beginning where continued foreign interest in equities elicited buying interest from local institutions as the index closed up 2.1% brushing past a key resistance level of 22,400 while churning decent volumes.”
“Among the triggers was also the news of a truce between two leading business groups of Pakistan (the bitterness between both the groups was recently spotlighted in the media and thus lowered investor sentiment) and expectations of an unchanged discount rate (monetary policy due in November) after minimal change in T-bill yields in yesterday’s auction,” Panjwani added.
“(The market) saw investors getting back their confidence to some extent as rumours of strong foreign interest continued in the market. Participation in the market was seen by local institutions as well, as most of them are cash rich as of yesterday’s data. Cements changed the momentum in the dull market followed by Engro Foods which closed at its upper circuit,” said Fahad Ali of JS Global.
Trade volumes rose to 119 million shares compared with Wednesday’s tally of 91 million shares.
Shares of 325 companies were traded on Thursday. At the end of the day 171 stocks closed higher, 130 declined while 24 remained unchanged. The value of shares traded during the day was Rs6.3 billion.
Engro Corporation was the volume leader with 9.8 million shares gaining Rs3.96 to finish at Rs126.86. It was followed by Jahangir Siddiqui and Company with 8.3 million shares losing Rs0.11 to close at Rs7.46 and Pakistan Telecommunication Limited with 6 million shares losing Rs0.67 to close at Rs26.64.
Foreign institutional investors were net sellers of Rs90 million, according to data maintained by the National Clearing Company of Pakistan Limited.
Published in The Express Tribune, November 1st, 2013.
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