Huge foreign buying tosses index to record high

KARACHI: A scintillating rally at the stock market on Thursday tossed the KSE-100 index up by 556.26 points or 1.92pc to the highest ever level at 29,543.58. The sudden jump in the stock prices surprised many investors. With no new significant trigger or an excitingly positive news, the outbreak in the index after several days of lacklustre trade raised suspicions of some kind of manipulation of the market by major players. However, the mystery was solved as the figures released by the National Clearing Company of Pakistan showed huge foreign inflow of $16.30m in the equity market on Thursday. The overseas investors entered into buying spree in index heavyweight stocks. According to a break-up, foreign inflows was heaviest, amounting to $7.6 million in oil and gas sector followed by $3.1m in electricity sector; $2.7m in cement and $1.7m in banks. Most of the heavyweight stocks in the index made tremendous gains. Engro was up by 4.6pc; MCB Bank up 3.3pc; D.G. Khan Cement rose by 4.4pc and Lucky Cement gained 3.3pc.

On the oil and gas sector, PSO and Hascol shot up by 4.64 and 4.9pc while Mari hit the ‘upper circuit’ with gain of 5pc. OGDC recouped the earlier losses and finished up by2.4pc on Thursday. Analyst Ovais Ahsan observed that the stocks rallied on pre-budget optimism as market participants anticipated a pro-business budget by the government. The market finally broke a spell of directionless activity and low volumes with the blue chips leading the charge. Volumes on Thursday surged by 60pc to 351m shares and 78pc in terms of trading value. While the foreigners picked up equity at the current prices, the local participants, both individuals and institutions seized the opportunity to take profit at high levels. Published in Dawn, May 30th, 2014