KARACHI, May 28: Stocks roared ahead on Tuesday with the KSE-100 index amassing massive gains of 542.86 points to cross over the 21,500-mark and settle at 21,501.72 points. The bulls recovered all the lost ground of Monday’s 324.91 points.

The robust rally on Tuesday caught most investors by surprise. In the lead were the energy stocks, with APL; OGDC; POL; PPL, Mari and PSO all reaping double digit gains and most hitting their 'upper circuit'.

The foreigners' favourite MCB Bank also hit its upper circuit with gain of Rs12.84.

According to analysts’ calculations, because of their heavy-weight in the index, the half a dozen stocks could have together contributed more than 350 points to the index.

Since the investor interest was concentrated mostly on the overseas investors favourite heavy-weight stocks, the market was thought to be led by strong foreign buying. The figures released by the National Clearing Company of Pakistan in the evening on Tuesday showed that the net foreign inflow amounted to $7.08 million.

Among local participants, mutual funds were also net buyers of stocks worth $2.90 million. Companies sold $1.68m worth stocks; banks offloaded $2.90m. ‘Other organisations’ and individuals also went into profit taking with net sale of $2.22m and $2.36m worth stocks, respectively.

The rally has since long known to be led by foreign investors. Yet, some analysts are unimpressed. Research team at Topline Securities observed that excluding the Unilever Pakistan stock buy-back by its sponsors, the net foreign buying was to the tune of $186 in 2013 year-to-date.

Although better than the previous year, the foreign investment number was not all that impressive considering that other comparable markets had seen inflows far higher than the KSE.

Analysts said that according to their estimates, foreigners held close to $4 billion worth shares in KSE which amounted to 8 per cent of market capitalisation and 30 per cent of free float.

Relating to the market trend on Tuesday, AHL Equity Sales commented that the benchmark sprang back into action making Monday’s fall look like an odd event. The premise underlying the investors’ focus on energy shares was that the energy situation was on top of political agenda and any improvement was likely to benefit company operating in that sector.

Furthermore, privatisation of state-owned entity was also on the cards, which was likely to attract another set of investors.

Yet many analysts like Wasi Khan at JS Global cautioned that only fundamental and dividend yielding stocks should be selected for trading.

The market capitalisation based KSE-30 index gained 501.03 points to 16,729.40 points.

In all, 387 stocks came up for trading, with 257 gainers, over twice the losers at 107. Turnover increased by 30 per cent to 305 million shares, from 235 million shares the previous day. Trading value jumped by 63 per cent to Rs10.9 billion from Rs6.7bn. Market capitalisation increased by Rs118bn to Rs5.221 trillion, from Rs5.104tr.

The volume leaders included Dewan Cement with 44 m shares, up by 92 paisa to Rs8.44. It was followed by Bank of Punjab (right issue) higher by 14 paisa to Rs2.42 on 26m shares.

Fauji Cement also gained 40 paisa to Rs11.86 on 16m shares, PTCL was up 46 paisa to Rs21.25 on 14m shares, Bank of Punjab added 23 paisa to Rs11.80 on 11m shares, Bank Alfalah was up 21 paisa to Rs17.49 on 10m shares, Lafarge Pakistan rose 36 paisa to Rs8.09 on 9m shares, Pace (Pak) up 36 paisa to Rs8.09 on 9m shares, Pakistan Petroleum rallied Rs8.72 to Rs220.70 on 8m shares and Maple Leaf Cement up by 66 paisa to Rs21.04 on 7m shares.