KARACHI: The stock market staged its grandest rally in 19 months on Tuesday, after Pakistan Tehreek-i-Insaf (PTI) chief Imran Khan backed off from a planned “lockdown” of the capital Islamabad.
The benchmark KSE-100 index soared 1,406 points (3.52 per cent) to storm past the 40,000 mark and closed at 41,300.
As many as 95 stocks hit their upper circuits, reflecting the maximum gain of 5pc permitted for a day in any stock.
At the start of the session, the index sank further by 38 points. But the mood of investors quickly changed from despondency to wide-eyed optimism after the Supreme Court passed a decree that it would decide on a commission to probe the Panama Papers leaks as per its own terms of reference.
Hearing was suspended till Thursday. Investors sensed thaw in the seemingly unending battle between the two political rivals as PTI changed the “lockdown” of Islamabad on Wednesday, to celebrate a “thanksgiving” day.
Following the development, intense buying across the board propelled the KSE-100 index and it recaptured almost all of the 1,419 points (3.44pc) that it had lost last week. The market capitalisation also rose by Rs276 billion on recovery in stock prices.
The rally was further fuelled by the Standard & Poor’s announcement of rating upgrade of Pakistan from B- to B with stable outlook after a period of seven years. The rating agency upgraded Pakistan’s rating from CCC+ to B- in August 2009.
Volume on Tuesday jumped to 507m shares from 237m shares traded a day ago and trading value surged to Rs17.2bn from Rs7.6bn.
According to analysts at JS Global, the inflation for the month of October, which clocked in at 4.21pc year-on-year, was higher than expected, resulting in a strong rally in the banking sector. Habib Bank rose 3.5pc, Lucky Cement 5pc, United Bank 3.92pc, Engro Pakistan 4.71pc and Pakistan Petroleum 4.71pc; they all contributed 415 points to the KSE-100 index.
Published in Dawn November 2nd, 2016