Stock market regains 1,100 points to recover from previous day’s plunge

KARACHI: Pakistan’s main stock index witnessed a bullish trend as it rebounded over 1,100 points during day trading on Tuesday, a day after the market plunged around 3.5 percent on fears of a selling spree by foreign investors.

The benchmark Karachi Stock Exchange (KSE) 100-index was hovering around 30,028.85 points at 1 pm, up 1,101.81 points or 3.81 percent from its previous close of 28,971.

The previous day, the index tumbled 1,252 points to 28,706, a drop of 4.18 percent – one of the largest falls in a single day in recent years – before it recovered somewhat to end on 28,971, down 3.44 percent.

The KSE has enjoyed startling growth in recent years even though Pakistan has been racked by militancy and political upheaval for more than a decade.

But from the start of January to March 29, the market saw an outflow of foreign investment of $131 million compared with a $384 million inflow last year.

There was speculation in the market that local buyers had overrun their capacity to absorb more offloaded shares from foreign investors, while rumours were also circulating that some stockbrokers were also on the verge of default.

But investor confidence appeared to have returned as the bourse recovered today.

The government of Prime Minister Nawaz Sharif has been trying to boost Pakistan’s flagging economy since being elected in May 2013.

Last week, Moody´s upgraded Pakistan´s dollar bond rating one notch from stable to positive on the back of improving macroeconomic indicators. The financial ratings firm said its decision came in view of strengthening foreign exchange reserves.