The share prices closed on a new high level after a massive correction, after receiving support from the financial institutions and leading brokerages helped consolidated the bulls position in the local bourses.
The market showed more volatility during the current week than it has over the past several weeks. The bulk of this volatility can be attributed to the 86.96 points or 1.83 percent, the decline on the first day of the week.
The primary cause of this fall was the prolonged the COT period on account of Eid holidays. However, a large portion of this loss was regained on Tuesday and overall, the index continued on its weekly trend of slow upward movement. The index closed at the new all-time high of 4,841.59 on Friday's session, as opposed to 4,764.12 at the end of last week, translating into a WoW gain of 1.63 percent.
Analysts said the main catalyst for the ongoing rally in the index has been a run-up in second-tier stocks, which made the first-tiers more attractive. It was the interest of investors in the latter that considerably helped in regaining Monday's losses. Stocks such as PTC and Hubco continued to perform well throughout the week, and stretched the upward journey of index for yet another week, they added.
The continued inflow of earnings reports from the corporate front is likely to be the key driver of the market's direction for the next few sessions. Given that trading in the stock market will be carried out only on one day in the coming week on account of Eid and Kashmir Day holidays, the effects of these results are likely to spill over to the trading sessions in the week after the next one.
Traders continued to believe that the market has discounted the expected results, and barring any major surprises, these announcements should not translate into a significant increase in volatility. Moreover, despite performing well during the week, first-tier stocks still appear to offer value, and should provide a stable cushion if investors turn bearish on the second-tier stocks.
On Monday, Nishat Mills announced its first quarter EPS of Rs 1.23 and the price of the stock remained firm throughout that session to close positive in a declining market. Ibrahim Fibre defied market pressure, and was up 3.5 percent to close at Rs 34.00 as it announced better than expected 1QFY04 results (EPS Rs 0.81).
Engro announced an EPS of 10.13 with final dividend of 35 percent and nil bonus. Hubco's result without any dividend was a non-event as everyone was aware that the dividend would only be considered in March.
There is an interesting thing to note that most of the textile companies are announcing excellent first quarterly results, and their stock prices are reacting to that by closing limit up though the volumes are still very low.