On the back of positive news, relating to extension of CFS, increase in CFS-eligible scirps, and delay in implementation of VAR system, bullish trend returned to share market on Friday.
As a result, the KSE-100 index gained 301.36 points, closing at the intra-day high level of 11246.71 points, and the KSE-30 index gained 388.87 points, closing at 13837.66 points level.
The market opened on a strong positive note and remained in the green during both sessions. The ready market volume shot up to 286.462 million shares from 196.859 million shares traded on Thursday.
The overall market capitalisation increased by Rs 86 billion to Rs 3.097 trillion. Out of 315 scrips traded, 213 closed in positive column and 70 scrips closed in negative column while the value of 32 scrips remained unchanged. OGDC remained the volume leader with 51.651 million shares, while heavy buying was witnessed across the board in all sectors as well.
Junaid Iqbal, analyst at Jahangir Siddiqui Capital Markets, said that the market performed well on the back of positive news related to the meeting between KSE management and SECP held on Thursday and approved the extension of CFS limit to Rs55 billion from November 6, 2006, increase in CFS eligible scrip to 71 and delay in implementation of VAR system to December 4, 2006, KSE-100 index increased by 301 points to close at 11,247.
Volume in ready market was up by 45 percent, while the volume in futures market increased by 43 percent to 116.212 million shares. Asad Abdul Razzak, analyst at Live Securities, said that the market rebounded in a blissful manner as KSE-100 index witnessed 301 points massive jump to close at the 11247 points following reports regarding CFS limit enhancement and extension in implementation of the new risk management system.
The index giant OGDCL gained 2.4 percent to Rs 141.75 and remained top volume leader at 52 million shares. PPL and POL posted 4.1 percent, ad 3.5 percent respective increments to close at Rs 256.45 and Rs 352.40. FFBL also performed superbly as the scrip closed limit-up with healthy volumes at 25 million shares.
Barring Prime Bank, the entire banking sector closed in the green with handsome gains. NBP, MCB and Faysal Bank depicted 4.6 percent, 3.1 percent and 3.5 percent respective increments while BoP and Bank Alfalah closed at their upper circuit levels.
Cement depicted an encouraging performance as D G Khan and Fauji increased by 3.9 percent and 3.6 percent respectively while Lucky increased by 0.9 percent to Rs 90.80. Surprisingly, Thursday's performer Hubco posted 0.4 percent decline to close at Rs 26.10 on profit taking.
Bulls completely dominated the market as gainers outnumbered losers with a margin of 3 to 1. Hasnain Asghar Ali at Aziz Fidahusein Securities said that 'All is well that ends well' as the visit by the winning team of KSE brokers finally convinced the flexible regulators and won for the market the space to breathe.
As expected, the index registered an air pocket opening as across the board short covering was witnessed on opening, although bearish forces did make an attempt to pressurise the market by offering huge quantities in the index heavyweights, particularly those in oil and gas exploration stocks.
The attempts duly failed as value temptations and huge short positions allowed the bulls to bounce back with force and almost all main stocks recovered substantial ground and the index closed 2.75 percent high.
Despite a massive recovery, the healthy macro economic numbers and corporate announcements will allow the index to travel north. It is therefore recommended to accumulate main and promising stocks around current levels as the next major resistance, after a mild resistance around 11290-11296, stays at 11510-11517, while index will continue to find support around 11070-11077.
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