KSE crosses 9,000 psychological barrier with 461.45 points gains

LAHORE - Bulls comprehensively dominated in Karachi stock market and crossed the 9,000 psychological barrier as bourse remained quickly to respond to the changes occurred at national and international level. Investors took their position in blue chips on account of good results announced by most of the companies particularly banks, oil and cement sectors. Market witnessed an unprecedented bull-run due to foreign investment inflow that played a crucial role in achieving the 9,000 level but analysts doubt the level is too fragile to be sustained in the coming week in an overbought market.
The stakeholders will not forget August 27, 2008, when index was frozen at around 9,100 points and KSE was at vulnerable stage of round 5,000 points afterwards. But after almost a year, market is able to achieve the same level. Whether any one believes it or not, its all about the fundamental of stocks and economy that rules the game.
The Karachi Stock Exchange (KSE) 100-index gained 461.45 points to close at 9,002.67 as compared to 433.22 points to close at 8,541.22 points the previous week. Brokers and analysts are of the view that other major factors that supported the market included rise in international oil prices near to $73 per barrel in London trade, Foreign players net investment of $45.285 million in leading shares in just two days.
On Tuesday, offshore investors invested $21.3 million (gross buy of $24.9 million and gross sell of $3.6 million). Moreover, total investment made by foreign players on Monday dramatically inched up to $23.99 million (gross buy of $26.5 million and gross sell of $2.5 million).
This foreign interest in the local stock market has totally changed the markets direction that made the index to travel towards sky.
The turnover was recorded at 250.150 million shares as compared to 162.002 million shares the last week, reflecting a massive rise.
The Karachi stock market started the business week with over 8,541.22 mark.
The details of the week is as, the first day of business week, Monday, KSE started operation with a very positive note as KSE 100-index added another 134 points as raise in POL prices invites fresh interest in oil and petroleum sectors. Britains 665 million pounds pledge for Pakistan, expectation of significant reduction in CPI figures for August near to 9.6 percent YoY, rise in international oil prices and continuing foreign interest played a key role in positive activity. Trading activity remained highly impressive as the ready market volume inched up to 263.164 million shares.
On very next day, Tuesday, the KSE 100-index added another 93 points to close at 8,769 points. Investors took positions in blue-ships despite intra-day profit taking by the institutions.
Moreover, rise in fertilizer sales by 261 per cent and increase in local petroleum prices played an important role in positive activity at the KSE.
Market volume dramatically inched up to 302.831 million shares compared to last days 263.164m shares
However, on Wednesday, the stocks led by the energy and banking sectors closed at their highest level of the year and benchmark 100-share index gained 109.40 points (1.25 per cent) to close at 8,878.64, the highest closing of the year. The ready market volume squeezed to 257.637 million shares.
On Thursday, the Karachi stock exchange shed around 61 points on correction as selling activity was witnessed in overbought market, which forced the KSE 100-index to close at 8,817 points. During the day, market lost around 160 points before recovering to close the index. Volume was quite encouraging and healthy and was above 200 million shares.
It is important to note that Thursday was the first day after 10-12 days when bourse has witnessed an unprecedented bullish spell.
The last day of the business week Friday proved to be a lucky day for the stock market as the KSE 100-index crossed the 9,000 psychological barrier with healthy volumes as foreign investment continued to flow in blue-chip stocks while the benchmark gained massive 185 points.
Intense buying was witnessed at the local bourse as foreign investment continues to flow in oil, banks and fertilizer sectors.
While retail/institutional investors took positions in blue chips on back of support from foreign investors. Trading activity fell below 200 million shares mark as the ready market volume squeezed to 197.163 million shares.