KARACHI: Stocks staged surprise rally on Monday with the KSE-100 index gaining 506.59 points (1.53 per cent) to close at three-week high at 33,563.38.
Volumes, however, declined by 14pc to 261.2 million shares of Rs11.6 billion value, from Friday’s turnover at 304m shares of Rs13.7bn.
A sizeable sum of $7.99m was bought by foreign investors with inflows of $3m in cements; $2.6m in banks and $1.1m in oil and gas sectors.
Analysts and dealers mentioned various reasons for the swift rise in equity values.
Moreover, the reports that National Economic Council (NEC) was likely to approve Rs1.6 trillion consolidated development programme for FY16 after accommodating Rs29bn in federally-funded provincial projects, sparked investors’ interest in cements, iron and steel.Faisal Shaji, corporate sales head at Standard Capital Securities, said the realisation of no excess burden of Capital Gains Tax (CGT) triggered heavy investment in equities by both the local and foreign investors.
Dealers at Topline Securities mentioned that the rally was fuelled by the Consumer Price Index (CPI) figure for May 2015 which was announced at 3.2pc by Pakistan Bureau of Statistics.
“Institutional support helped HBL gain 4.7pc, UBL 3pc and ENGRO rose by 4.7pc, while the textile sector saw renewed interest in anticipation of favourable policies in the upcoming budget,” Topline said.
Analyst Ovais Ahsan at JS Global commented that the market opened the week on a strong note “as liquidity trumped concerns over the budget with local institutions buying across the board”.
Analyst at AKD Securities observed that going forward the gaining trend will further pick up due to ample liquidity in the system. Conversely, any negative development in the budget could exert pressure on the market.