KARACHI, Oct 14: Stock market on Monday halted the post-election sell-off as bulls made deeper inroads in the stronghold of bears after picking up most of the leading shares at the weekend dips but analysts fear the snap rebound could be deceptive. The KSE index recovered to finish 2.86 points up at 2,039.85 after briefly breaching through the barrier of 2,000.

The post-election political scenario is still unclear regarding a stable government at the centre and until investors found a cue of the coming political events they will play safe. Financial institutions as well as institutional traders could have another line of thinking backed by their strong liquidity positions and capacity to take financial risks.

The return of a bull market in the backdrop of many ifs and buts surprised many leading stock analysts but without comments and preferred to keep silent awaiting the market’s next move, one broker said.

Auto and fertilizer shares, however, did not follow the market’s general trend and rose sharply on active support aided by market talk of higher earnings and expectations of handsome payouts.

After having fallen early by 37 points, the KSE 100-share index staged a a smart recovery toward the close and finished with a modest rise of 2.86 points at 2.039.84 as bull fought back and made extensive short-covering at the weekend lows in the pivotals.

“I will not call it an inspired support from some invisible quarters to allay the fears that election results were not that bad for the market,” says a leading stock analyst “but there are not many genuine reasons to be happy until the new government is in place.”

Some of the investment banks, notably those having strong links with the Gulf money and local institutional traders were active among the buyers on the blue chip counters at the lower levels where the risks of a major fall are remote.

“But if the spilt mandate in typical Pakistani conditions is any indication the market boost may be deceptive in a broader future perception,” most brokers believe. “Snap rallies in the backdrop of an expected political polarization could be attractive not in the final analysis.”

The general perception was that the market could erode couple of more points until a clear picture emerges on the political front, notably the shape of the coalition government in centre but bulls are not inclined to be sidelined at this crucial juncture.

Apart from the fallout of the election results, combined with fears of political instability, the early steep decline of 37 points was also attributed to press reports that sell-off of state stake in PSO has been deferred.

Pre-election official statements said it will be sold to a strategic investors during the current month as short-listing of a couple of parties has already been made.

Top gainers were led by Fauji Fertilizer, Security Papers, Pak-Suzuki Motors, Mitchell’s Fruits and Pak Resource Company, which posted gains ranging from Rs.2.95 to 52.50, leading losers were led by most of the leading MNCs including Abbott Lab, Shell Gas, Shafiq Textiles, PSO and Wyeth Pakistan, falling by Rs.1.90 to 10.

Dilon, Shell Pakistan, General Tyre, Indus Motors and Unilever were others among the prominent gainers, rising by Rs.1.95 to 2.90.

The sharp rise in Pak Reinsurance Company followed by reports of bonus shares in the ratio of 1:9.

Reports that the National Bank’s recent sell-off of five per cent shares was highly oversubscribed failed to boost its share value, although it continues to be an attractive bait for future investment.

Trading volume fell to 123m shares from the previous 139m shares as losers and gainers were about evenly matched at 114, with 47 shares holding on to the last levels.

Hub-Power topped the list of most actives, up five paisa at Rs.24 on 29m shares followed by PSO, off Rs.5 at Rs.188 on 19m shares, PTCL, unchanged at Rs.19.70 on 17m shares, Engro Chemical, higher by Rs.2.80 at Rs.65 on 9m shares, Fauji Fertilizer, up Rs.2.95 at Rs.58.55 also on 9m shares, National Bank, lower 15 paisa at Rs.21.90 on 4m shares and MCB, off 20 paisa at Rs.27.75 also on 4m shares.

ICI Pakistan, followed them, off 30 paisa on 3.277m shares, Adamjee Insurance, easy 30 paisa on 2.693m shares and KESC, lower 15 paisa on 2.654m shares.

FORWARD COUNTER: Massive selling in PSO followed by rumours of delay in its privatization triggered sympathetic unloading in other speculative shares, the on-balance trend being on the lower side.