KARACHI, Feb 17: Stocks on Monday staged a smart recovery as the post-Eid holiday session witnessed an avalanche of buystops at the lower levels but there was no matching selling from any quarter. The KSE 100-share index recovered 91.33 points or 3.78 per cent at 2,509.38.

Although the market capitalization soared by Rs17bn to about Rs555bn, a section of leading investors fear that the bull-run could be deceptive not fully supported by the background news excepting market’s highly oversold position.

After having lost 540 points or 16 per cent during the last two weeks the KSE index bounced back on heavy institutional buying in the pivotals such as PSO, Shell Pakistan, Hub-Power and PTCL, some of them having breached through the circuit breakers.

The market seems to have ignored the possible negative impact of the murder of a top Muttahida Qaumi Movement (MQM) leader on Sunday evening as investors apparently did not fear law and order situation.

The KSE 100-share index had fallen by 540 points from the peak level of 2,954 to 2,418 during the pre-Eid sessions amid predictions that it could fall to 2,000 point level. The Breach of the 2,500 index barrier is, however, significant in more than one ways.

The snap rally gave a pleasant surprise to most of the leading stock analysts as they were expecting the extension of pre-Eid holiday bear-run fearing a negative fall-out of the killing of the MQM leader.

It is interesting to note that the turnover figure did not match the steep increase in the index as short sellers kept to the sidelines awaiting further developments on the law and order front.

“The current lower level could well be an attractive bait for any prospective investor,” brokers said. “Why they chose to stay out is clear from their future perceptions about the stock trading.”

But the breach of the 2,500 index level has demonstrated that bulls are back in the market and are expected to indulge in active short-covering in most of the pivotals and blue chips at the prevailing lower levels, brokers said.

However, they ruled out the possibility of any major breakthrough at this stage as external background news, notably the Iraq situation may not allow bulls to go beyond the sustainable levels.

“The terribly low volume reflects that brokers spent much of the time in exchanging Eid greeting rather than indulging in large business,” analysts said and hoped that by “Tuesday the trading will get normal”.

Energy shares and blue chips on other counters led the market advance under the lead of PSO and Shell Pakistan, which recovered by Rs13.35 and 14.35 respectively. Others, which rose above Rs2 included 4th ICP, ICP SEMF, Jahangir Siddiqui & Co, Javed Omer, Pakistan Refinery, Indus Motors, Pak-Suzuki, Engro Chemical, Cherat Papers and Unilever Pakistan, the largest rise of Rs9.10 being in Pakistan Oilfields.

Major losers were led by Colgate Pakistan and Wyeth Pakistan, off Rs3.15 and Rs26 followed by Dawood Cotton, Bannu Woollen, Shell Gas, BOC Pakistan, Ghani Glass and Tri-Pack Films, off Rs1.90 to Rs2.10. Traded volume rose modestly to 112m shares from the previous 82m shares as gainers outpaced losers by 156 to 71, with 25 shares holding on to the last levels.

Hub-Power led the list of actives, sharply higher by Rs1.80 at Rs35.70 on 34m shares followed by Pak PTA, higher 85 paisa at Rs7.90 on 15m shares, PSO, up Rs13.35 at Rs191.60 also on 15m shares, FFC-Jordan Fertilizer, firm by 65 paisa at Rs11.40 on 9m shares, PTCL, steady by 95 paisa at Rs21.65 on 8m shares, Sui Northern Gas, firm 35 paisa at Rs22.10 on 5m shares and MCB, up Rs1.05 at Rs34.25 on 3m shares.

Other actives were led by Pakistan Oilfields, sharply higher by Rs9.10 on 3m shares, Dewan Salman, up 75 paisa on 2.355m shares and ICI Pakistan higher by Rs1.30 on 2m shares.

FORWARD COUNTER: Hub-Power led the list of actives, up Rs1.60 at Rs35.75 on 8m shares followed by PSO, which breached through its circuit breaker, higher by Rs13.40 at Rs192.50 on 5m shares and PTCL, up one rupee at Rs21.80 on 2m shares.