KARACHI, April 25: Stocks on Friday staged a partial recovery followed by active short-covering in most of the pivotals aided largely by a good second interim dividend by PSO and Dawood Hercules and higher earnings by ICI Pakistan and Sui Northern Gas. The KSE 100-share index recovered 25.18 points at 2,859.31.

After showing highly erratic price movements earlier, stocks staged a smart recovery in the afternoon session raising hopes that the worst may be over at least for the near-term as the strength of higher corporate earnings will finally prevail.

PSO’s second interim dividend of 30 per cent makes the total for the nine months to 90 per cent as its management has already paid an interim of 60 per cent to its shareholders.

A cash interim dividend of 40 per cent from Dawood Hercules not only pushed its share price sharply further higher but together with PSO it put the market back on the rails at weekend session, which generally induce profit-selling.

Most of the leading institutional traders are eyeing the outcome of government-opposition talks on the LFO and if the talks fail there could be a snap sell-off by the weakholders and the future direction of the market will depend “whether or not the institutional traders come to its rescue”, most brokers believe.

However, the opening was highly erratic as the KSE 100-share index moved within 40 points either-way before the trading was suspended around 11.15 am owing to a technical fault in the computer network.

But in the afternoon session, it managed to finish modestly higher at 2,859.31 after earlier breaching the barrier of 2,800 at 2,891 boosted by reports of higher corporate earnings from some of the leading shares including 30 per cent interim cash dividend by the management of PSO. The net recovery over the day was 25.18 points.

Analysts said the market seems to be weighed down by the political tension and rigid positions taken by the opposition and the government on the issue of LFO. As far as news from the corporate sector are concerned they could give the needed push to the stock market owing to some positive developments on the external front.

“India’s offer of talks on the hot issues alone could push the market to new highs”, one broker predicts and added to it are some positive developments on the home economic front.

Hopes are now pinned on the Opposition talks with the prime minister to sort out the issue later this evening despite the prevailing skepticism that the prime minister could not deliver and just convey the message of the president who has already spoken on the issue in his Thursday meeting with the editors of the newspapers.

“The market could react if the talks failure”, analysts said adding “the rally expected to manifest itself in a bigger way on the strength of higher corporate announcement may falter halfway”, analysts said.

The board meetings of over a 100 companies including some leading MNCs and local big ones are due before April 30, and there could be many a surprises in their interim working results for the investors leading to handsome capital gains.

Already leading financial institutions are a bit shaky about the long-term equity investment owing to some rethinking in the central bank corridors about the issue and if it happens the inflow of fresh funds may not be that aggressive as it has been since early this year.

Leading gainers were led by Javed Omer, EFU Life, Babri Cotton, Burewala Textiles, Gatron Industries, PSO, Atlas Battery, Siemens Pakistan, ICI Pakistan, and Dawood Hercules, higher by Rs2 to Rs4.

Losers were led by Pakistan Refinery, Shell Pakistan, Abbott Lab, Reckitt and Benckiser, Unilever Pakistan, Honda Atlas, Clariant Pakistan, Ferozsons Lab and Wyeth Pakistan, off Rs1.90 to Rs14.95.

Trading volume failed to expand beyond the overnight level and was placed at 157.077m shares but gainers held a modest lead over the losers at 117 to 90, with 29 shares holding on to the last levels.

Hub-Power topped the list of actives, up by 30 paisa at Rs34.35 on 38m shares followed by PTCL, higher 45 paisa at Rs24.40 on 35m shares, PSO, up by Rs3.35 at Rs204.85 on 14m shares, Sui Northern Gas, higher 70 paisa at Rs26.45 on 13m shares and Pakistan PTA, firm by 15 paisa at Rs8.85 on 10m shares.

PIAC (A) led the list of other actives, higher by 65 paisa on 7m shares, FFC-Jordan Fertilizer, steady five paisa on 6m shares, KESC, unchanged at 6m shares, KCB, up 95 paisa on 3m shares and D.G. Khan Cement, up by 70 paisa on 3m shares.

FORWARD COUNTER: Speculative issues on the forward counter also finished recovered from the early lower under the lead of PSO, which recovered Rs3 at Rs204.50 on 6m shares.