The Karachi Stock Exchange (KSE) recorded a grand recovery on Tuesday, mostly because the prices in the last six sessions had entered in the oversold zone, attracting investment in oil, gas, and banking sectors.
Expectations of better results from some banking companies helped the index in breaching its previous day's close. But the market still remained under pressure as it moved in the range of 305 points making an intra-day high and low of 11942 and 11634, respectively.
The banking sector remained in the limelight and the giants NBP, MCB and BOP rose by Rs 12.15, Rs 6.40 and Rs 4.10, respectively, whereas the earlier results announced by UBL and UNBL also helped in posting positive sentiment, rising by Rs 6.15 and Rs 3.65, respectively.
Expectation of better results announcement pushed the share prices of NML, LUCK and PSO, which were up by Rs 4.8, Rs 1.25 and Rs 2.1, respectively. E&P continued to solidify the index as its all players posted a significant rise. OGDC rose by Rs 2.50, contributing more than 40 points to the index, while POL and PPL rose by Rs 5.30 and Rs 2.80, respectively.
The turnover was still on the lower side, hurting the market sentiment. Any improvement, or above 300 million shares, would help boost the confidence of general investors. Though the market rose sharply, most of the seasoned investors stayed away from the rings despite the fact that several scrips had entered the oversold zone.
The higher investment level in futures contracts was disturbing the investors. As soon as the smooth switchover is completed the market would see good volumes and sizeable recovery in the index, a leading trader said.
A leading analyst said that massive correction continued in the market in the beginning. However, in the later part of the day, after breaching the pivot figure of 11,700, it surged with no looking back. At these levels investors regained confidence and buying spree was witnessed by high net worth individual and institutions brought it by 139 points positive above Monday's closing.
Recovery was witnessed on results in all major sectors, particularly oil, banks and cements. Another factor attributable towards this recovery was the encouraging results announced by Fauji Fertiliser and Engro Chemicals with as EPS of Rs 2.5 and Rs 3.08 respectively as well as 22.5 percent dividend declared by FFC. BOP also remained positive throughout on behalf of better result expectations and closed at its upper circuit breaker.
NBP was the star performer of the day with the scrip soaring by 4.7 percent to close at Rs 272.00 and contributing 34 points to total index's surge. Other banking scrips like MCB, Faysal Bank and Bank Alfalah posted increase at 2.6 percent, 3.8 percent and 3.5 percent, respectively, while BoP and Union Bank closed limit-up.
FFC rose 2.1 percent on the back of exceptional first quarter earnings and pay out. Revival was evident in cements on the back of the generally oversold nature of the scrips. D. G. Khan Cement and Maple Leaf Cement gained 1.2 percent and 2.3 percent to close at Rs 120.80 and Rs 38.00 while Lucky Cement rose 1.1 percent on higher earnings anticipation.