KARACHI: In anticipation of a market support fund, stock investors began building positions which saw the benchmark KSE-100 index close in the green for the second consecutive session on Tuesday gaining 191.56 points (0.58 per cent) to settle at 33,442.10.
The market took off to a dismal start due to the distress over the higher than expected policy rate hike of 150 basis points announced by the State Bank of Pakistan on Monday. Investors were also spooked by an unstoppable four-day decline in the value of the rupee in the inter bank market.
All round selling till mid-day saw the index plunge to intra day low by 398 points, breaching the 33,000 points level. However, the index reversed direction after mid day as the enticing valuations brought back value investors to cherry pick scrips. That propelled the index to intra-day high by 299 points.
Buyers took positions in shares which they thought would be the choice of ‘Stock Market Support Fund’ including the state owned companies like, Oil and Gas Development Company (OGDC), Sui Southern Gas Company Ltd, Sui Northern Gas Pipelines and Pakistan State Oil.
Those stocks closed near to their upper locks. Pakistan Oilfields Ltd and OGDC were the major movers from the exploration and production &P sector as crude oil prices edged higher in the international market.
Investors witnessed shares in the banking sector shed values despite increase in policy rate. Habib Bank Ltd, MCB Bank Ltd, Bank Al Habib Ltd and National Bank of Pakistan all closed in the red zone.
The two sectors, cement and steel, which have taking the heaviest beating in the prolonged seven-week bear market, saw the trend change positive as the buying was witnessed in the cement sector with Maple Leaf Cement Factory and Pioneer Cement close at their upper circuits and D.G. Khan Cement and Lucky Cement close with sizeable gains.
Steel sector also outperformed, where Amreli Steel Ltd, Crescent Steel and Allied Prodcuts, and Mughal Steel closed at their upper circuits while International Steel Ltd and Aisha Steel Ltd also ended close to their upper lock.
Selling by mutual funds slowed down on Wednesday to $2.64 million which was absorbed by the individuals who bought stocks worth $2.18m.