Stocks rally on easing geopolitical tensions

KARACHI: Stocks staged a strong rebound on Tuesday after a steep selloff a day ago. The KSE-100 index recouped all points lost on Monday as it recorded gains of 346 points, or 0.74 per cent, to close at 47,258.

The bloodless transfer of power to the Taliban in Afghanistan without the government putting up any resistance was heartening for the investors who believed that things could fall into place in the weeks ahead.

With the index faltering below 47,000 points level a day ago, stocks were thought to be now available at deep discounts. Buyers accumulated scrips across the board.

The mutual funds that were under-invested jumped to deploy cash in building fresh portfolio. They were the major buyers of stocks worth $2.29m.

Traders said that with shortened working week due to Moharam holidays, investors were confident that geopolitical situation in the region would have improved by next week as the UN Security Council Emergency Meeting had called for talks to create a new government in Afghanistan.

Moreover, Pakistan’s civil and military leadership decided to adopt a “wait-and-see” policy before making any move regarding recognition of the new regime in Afghanistan.

Investors were also encouraged by the extension of subsidised power and gas tariffs to the export sector for another year. The uptick was observed across the board, with major contribution to the index rise coming from power, cement, O&GMCs, banks and technology, automobile and steel sectors.

The trading volume declined 2pc over the previous day to 246m shares. TPLP, GGL, TRG, WTL and TELE contributed 35pc to the total turnover. Sector-wise, technology & communications recorded the highest traded volume of 51m shares.

The trading value for the day increased by 13pc to Rs11.5bn. Stocks that were major positive contributors to the index included Hubco (81 points), PSO (23 points), MCB (16 points), Kot Addu (15 points) and TRG (13 points).

Stocks that attempted to drag down the index included BAHL (6 points), KTML (6 points), FCEPL (4 points), PKGS (3 points) and HBL (3 points).