KARACHI: The stock market bounced back on Wednesday from its continued dismal performance as renewed buying interest lent support to the index, which surged nearly 1,000 points.

The KSE-100 index shot up from the moment trading began, gaining over 2% to power past the 37,600-point mark. Investors picked up stocks at attractive valuations as the index was at a 28-month low. All index-heavy sectors including automobile, cement and exploration and production closed in the black.

Earlier at 13:06, the KSE-100 index, a benchmark for market performance, was up 791.59 points or 2.16% to stand at 37,454.97 points.

In the past four sessions, the index had cumulatively dropped 5.6% and closed at the 28-month low of 36,633.83 points on Tuesday.

“It seems to be temporary and unsustainable buying,” remarked Arif Habib Limited Head of Sales Saad bin Ahmed while talking to The Express Tribune. “Investors are buying stocks at lower prices and selling them at low margins.”

“The across-the-board buying is (partially) backed by the government’s assurance to stockbrokers of considering reduction in tax rates on shares trading,” Elixir Securities’ analyst Muhammad Arbash said.

He said the imposition of regulatory duty on the import of over 500 goods, provision of gas to five zero-rated export sectors at a concessionary price and upcoming talks between Pakistan and the International Monetary Fund (IMF) for a bailout package were all positive developments aimed at fixing the faltering economy.

At close, the benchmark KSE 100-share Index recorded an increase of 983.96 points or 2.68% to settle at 37,647.34.

Elixir Securities’ analyst Murtaza Jafar commented that after losing 10.3% so far in the current month, Wednesday’s snap rally could be linked with a relief rally across all global indices.

“After the recovery, all eyes are now on the weekend meeting between the PSX Stockbrokers Association and finance minister for addressing the longstanding demand of reduction in stock transaction costs while allowing carryover of losses to the next tax year along with lowering capital gains tax (CGT) rates in line with the CGT on property,” Jafar said.

Overall, trading volumes increased to 194.2 million shares compared with Tuesday’s tally of 181.7 million. The value of shares traded during the day was Rs5.99 billion.

Shares of 385 companies were traded. At the end of the day, 324 stocks closed higher, 46 declined and 15 remained unchanged.

TRG Pakistan was the volume leader with 22.1 million shares, gaining Rs1.04 to close at Rs21.94. It was followed by Lotte Chemical with 10.6 million shares, gaining Rs0.98 to close at Rs14.22 and The Bank of Punjab with 8.7 million shares, gaining Rs0.59 to close at Rs11.15.

Foreign institutional investors were net sellers of Rs565.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.