KARACHI: Earnings and payout mania was duly energised by positive vibes from the visiting Chinese delegation, thus allowing main board stocks at the KSE to lead early gains, despite gloomy economic, financial and political environment.
The KSE 100 index closed at 11843.65 after gaining 57.56 points, while KSE 30 index closed at 11388.13 with a gain of 73.89 points. The all share index closed at 8288.63 and accumulated 39.55 points.
The total volume stood at 87,207,088. A total of 241scrips advanced, 157 dwindled and 19 remain unchanged out of total 417 scrips. However, despite substantial contribution by below par stocks, turnover stayed on the lower side.
Although, the likely impact of turnover tax to be reflected in upcoming annual results of the banking sector, various recoveries from large groups and expected cash and stock dividends, kept the sentiment upbeat in the banking stocks along with fertiliser and E&P (offering currency and inflation hedge).
The unprecedented inflows through off-shore accounts, besides directly providing liquidity, has certainly allowed the local companies to arrange more liquidity by off-loading cornered, illiquid and expensive stocks to the off-shore participants and duly invest the proceeds in comparatively liquid main board stocks. This allowed the main board stocks to invite a decent turnover along with the price discovery.
Early gains were duly checked by local corporate participants who generally opted for sector and stock swapping though, activity by the local financial groups in their respective companies along with high turnover generation by holding companies disallowed any major adjustment in the benchmark except for marginal adjustment due to day squaring.
The benchmark stood strong even at the highest levels of recent times, thus ignoring (for the time) technical recommendations of a likely adjustment of at least three percent to 3.5 percent.
Therefore capitalising on the recent rises for covering purchases on dips is likely to stay a prudent strategy along with sector and stocks swapping for maximising gains, while post adjustment consolidation need to be awaited for making bets for short term trading.
