Karachi stocks amid decreased trading volumes gained 481 points or 1.3 percent, Week-on-Week (WoW), to close at 36,222.63, slightly below an all-time high of 36,223. The market sentiments, equity analysts believe, were primarily driven by the earnings announcement session.
Amreen Soorani of JS Research attributes the rally to anticipated healthy corporate result announcements in the ongoing result season, soft CPI inflation numbers for the month of July and the World Bank's assistance offer worth $2 billion to Pakistan.
"Lower-than-expected CPI once again built expectations of another cut in the policy rate, improving the prospects for leveraged companies as the MLCF and PAEL gained 7.3 percent and 8.6 percent, respectively," said the market observer.
A below market consensus inflation rate, 1.8 percent YoY, shifted the investors' focus towards cement and other leverage sector despite lower dispatches for the period.
"Apart from that, political environment remained fairly well with not much happening on that front," noted Yawar Uz Zaman of Shajar Research.
A lower inflation figure pushed up buying appetite among investors for leveraged stocks, viewed analyst Abdul Azeem.
The daily trading turnover at the country's largest bourse, however, slid by 27 percent, WoW, to average on 295 million shares.
"Trading activities were largely supported by blue chips... amid low interest in second- or third-tier stocks," said Yawar.
The value of the stocks traded during the week under review averaged five percent higher on Rs 13.5 billion or $133 million.
The stocks shed significant value were from sectors like real estate investment and services, tobacco and telecommunication which downed 1.7, 1.5 and 1.2 percent.
Those appeared as major gainers were from pharma and bio tech, 8.4 percent, construction and materials, 6.1 percent, and automobile and parts, 4.8 percent.
The local mutual funds and foreigners bought portfolios worth $10.5 million and $5 million respectively, on net basis.
The net selling came from high net-worth individuals and banking sector which offloaded their positions by $14.7 million and $1.4 million.
The major net buying made by offshore investors was seen in sectors like chemicals, $10 million, oil and gas, $3 million, and banks, $2.8 million. While the major net selling was seen in cements worth $7.6 million.
Key highlights of the week were: the State Bank having cut refinancing rates by 150 basis points, IMF talks were held for the 8th review, government revised National Saving Scheme's profit rates upwards, forex reserves hitting all-time high of $18.82 billion and auto policy was tabled for approval by the ECC.
About future, Shajar analyst Yawar said the announcement of corporate results is likely to be the sentiment movers in the week upcoming. Similarly, he said, successful negotiations at Pak-IMF front could also move the index towards new levels.
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