The share market for the third day in a row on Monday recorded gains where almost every scrip on the board closed on its upper circuit-breaker and the attractive levels helped to index to cross the 9900-point level.
With slight dips in the positive territory, another pleasant session concluded with a net gain of 337 points. Finally, the index closed at 9943 level. This was the third consecutive rise in the index with a cumulative gain of 1175 points (13 percent) since the market touched its seven-month low of 8765 points.
The volume counter once again showed dreary performance as they perched up by 3 percent to 166.7 million, compared to 161.7 million of the last trading session.
The market, as expected, gained appreciably as the juicy levels prompted fresh buying in key scrips. "The volume is low, which appears to be a slight disturbing factor as some of the investors would sell their holdings accumulated in the recent bearish spell and gains made in the last two sessions of the week," Ahsan Mehanti, Chief Executive Officer at Shehzad Chamdia Securities Co said. However, these gains could only be sustained if the market men would receive some news related to privatisation. The easing of conditions for the Azgard 9 and early resolution of Pak Steel might bring some new life at the local bourse, he added.
An analyst said that cement sector remained in the positives, as customs officials had detained another shipment of Chinese cement. Cement giants Luck and DGKC rose by Rs 4.6 and Rs 3.95, respectively, cumulatively adding 10 million to the volume. E&P sector dominated the screen as POL, PPL and OGDC rose by Rs 15.95, Rs 9.5 and Rs 6.20, respectively. The E&P contributed almost 150 points to the rise in the index.
Fertiliser sector also ended in the greens as Engro, FFC and FFBL closed in the positive territory with the gains of Rs 8.85, Rs 2.05 and Rs 1.45, respectively.
Of the 325 companies traded, 170 companies closed in positive, 132 companies ended in the red, and 23 were unchanged.
Hasnain Asghar from Aziz Fidahusein said that the market saw an adjustment of 190 points, which invited fresh buyers, and the last one hour witnessed healthy activity that allowed major stocks to hit upper breakers.
Technically, however, the index twice tried to sustain above its resistance of 9950-9957 but failed to close above its major level. Technically, the inability of the index to manage at least 20 percent of the session's turnover above its resistance might force the index to step back to its support of 9770-9777 and consolidate thoroughly to rebound with a bang. Presence of nervousness can be capitalised; the stocks having values can therefore be accumulated around support levels, while another major resistance stays at 10250-10257.
Noor Hameed from Elixir Securities explained the nature of the market and said: "It seemed like it was only yesterday when the same market had nothing to offer and now it was unstoppable. The market staged an equally sharp rebound, as approximately 1174 points have been added back to the index in just one go (courtesy revision in rules regarding limiting lower circuit breakers to 5 percent or otherwise this market would have gone straight to hell).
"The irony is that when valuations got attractive there was very little on offer, as the big players had already wiped out the major chunk. Pick any stock and you'll find it on or near its upper circuit breaker. So it's always wise, as we have earlier stated on many occasions, to buy when all hope is lost."
A pullback was imminent after the index experienced its biggest fall of 5.8 percent in a single trading day. "For the past three trading days, we've been dying to buy this market suddenly realising that things are trading at throwaway prices: its horde mentality! Perhaps it's time to realise that one can make more money by having some faith in valuations rather than being a momentum player in a dodgy market."
Volumes still remain a bigger concern, as the market is not giving much room for people to accumulate stocks at lower prices. "Going forward, we anticipate profit taking at higher levels, but if momentum stays put even a broader based rally can develop but having said market needs to consolidates at lower levels before it proceeds further."
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