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THE share values last week staged a smart rally as investors covered positions in a highly oversold market at lower levels almost on all blue chip counters amid active trading followed by sharp gains.
The market’s extremely buoyant mood was also well reflected in the KSE 100-share index, which surged by 168.82 points well above the psychological barrier of 11,000 at 11,070.58 as leading base shares virtually raced towards their pre-reaction levels on strong covering purchases.
Most of the leading base shares, mainly OGDC, Pakistan Oilfields and Engro Corporation, had been under pressure for the last few sessions, while Nishat Mills, Fauji Fertiliser Bin Qasim, Fauji Fertiliser and ICI Pakistan were leading among them.
Even the banking giant National Bank of Pakistan, which had fallen below Rs40 level on persistent selling throughout last week as the bad loan episode was said to be terribly exaggerated, joined the rank of gainers although modestly.
“It appears to be a very unusual performance, as a long holiday, in normal conditions, prompts selling rather than buying,” analyst Samar Iqbal said and added “the tired bulls seem to be in no mood to sit on sidelines any more.”
However, bulk of support remained confined to blue chips, which had been under pressure for the last couple of sessions, and ensured higher capital gains.
“It was a judicious blend of both local institutional and foreign buying in line with the recovery of global stock markets,” another analyst Ahsan Mehanti said. The oil, banking and fertiliser shares, which had fallen to lower levels in the recent past, remained the centre of activity,” he added.
He said the snap recovery was expected to sustain during post-Eid holiday trading weeks, although there was no fundamental change in political scenario, particularly in the backdrop of allegations and counter allegations by political leaders.
Analyst Ashraf Zakaria was of the view that after having crossed the barrier of 11,000, the benchmark was expected to move steadily towards it pre-reaction level as most of the leading base shares were still in the firing range.
“The advent of foreign buying on the oil counter at the current lower level could be sustained in coming sessions also and that could well mean further rise in the index,” he added.
No one would deny the fact that the market was in a terrible mess, said analyst Salman Naqvi. Even semblance of good news could not boost investors’ morale and pull it out of the current impasse, he said.
“The perception of return of peace to the city after some serious official efforts to check violence generated a good bit of covering purchases on selected counters,” analyst Ahsan Mehanti said.
The credible performance of Engro Corporation after several weeks of battering on various counts was one of the chief positive developments in the market parlance, he said.
But much would depend on the return of foreign investors, some of whom had liquidated long positions in the oil sector during the last couple of weeks.
The notable feature was that both the top gainers and losers belonged to the group of most liquid shares and it was for the first time that the list was dominated by them.
Future counter: After an early fall, speculative issues on the forward counter recovered on active short-covering in Pakistan Oilfields, Engro Corporation, Fauji Fertiliser and some other leading shares. National Bank also resisted fresh fall and recovered modestly on positive reports of bad loan and their recovery.
But the midweek large selling in leading cement shares, mainly D.G. Khan Cement and Lucky Cement, the overall sentiment was on the higher side thanks to late buying in the oil and fertiliser shares.
On balance, however, the overall performance of the leading shares was on the higher side in sympathy with their counterparts in the ready section, which rose sharply higher under the lead of oil sector. —Muhammad Aslam
