Index gains 253.4 points

The KSE-100 index increased by 253.40 points during the week ended on September 24, 2011 to close at the level of 11,606.86 points on the back of both local and foreign investors'' interests. Foreign investors turned net buyers of shares worth $1.7 million during the week. Local investors and institutions also joined the rally and supported the index to register healthy gains.
Trading improved and the average daily volume at ready counter increased by 45 percent to 71.92 million shares as compared to previous week''s 49.59 million shares.
Market capitalisation increased by Rs 45 billion to Rs 3.060 trillion. On Monday, the market opened on a positive note and the index hit 11,390.30 points intra-day high. However profit taking in late hours reduced the gains and the index closed at 11,356.64 points, up only 3.18 points, with turnover of 31.165 million shares.
On Tuesday, renewed buying by both local and investors supported the index to register a gain of 166.24 points to close at 11,522.88 points, with 49.260 million shares.
On Wednesday, the market witnessed a bullish session and the index surged by 32910 points to close at 11,851.98 points with 117.143 million shares.
On Thursday, investors opted for profit taking on available margins and the index declined by 161.75 points to close at 11,690.23 points with 82.729 million shares.
On Friday, the index lost 83.37 points to close the week at 11,606.86 points with 79.298 million shares.
Yawar Uz Zaman, an analyst at InvestCap said that optimism was witnessed at the KSE after the Federal Bureau of Statistics (FBS) showed substantially lower inflation numbers for July 2011 and August 2011 at 12.43 percent and 11.56 percent respectively, and the government announcement of the resolution of the notorious inter-corporate debt through the issuance of PIBs (Pakistan Investment Bonds). Both news items led to the euphoria among investors and resulted in a 2.2 percent increase in the index.
Investors turned quite optimistic about a bigger cut in Discount Rate (DR) than the already expected 50bps in the upcoming monetary policy, which led to 500 points jump in the index in two consecutive sessions.
However, pressure from decline in world equities (amid rising global economic concerns) kept local market in check. On economic front, the country''s current account deficit squeezed to $189 million in the two months of FY12 while the oil import bill continued to escalate in August 2011, up 67 percent on year-on-year basis.