KARACHI, Oct 21: Stocks on Tuesday failed to extend the overnight recovery as leading investors again withdrew to the sidelines after taking profits at the initial inflated levels boosted by upward revision of debt rating.

The early robust rally triggered by reports that Moodys Investor Services has upgraded Pakistan’s sovereign foreign currency rating to B2 from B3 owing to better management of foreign debt could not be sustained as follow-up support turned shy.

The market’s initial positive reaction to the new rating was, however, well-reflected in the hefty 59 points in the KSE 100-share index but as the financial support turned shy, it finished with a modest fall of 3.84 points at 4,001.56 as compared to 4005.40 a day earlier.

Analyst said although the latest rating takes Pakistan within the five notches below the investment grade but still keeps it in the speculative grade. Standard & Poor on the other hand put it at B level during its last December rating.

“The latest upgrading may have a negative impact on the financial markets as it signals decline in the country’s risk premium,” he says adding “but the stock market having very limited presence of foreign funds gave a positive reaction as was reflected by early sharp rise of 59 points in the index.”

However, in the absence of strong financial support bargain-hunters also played safe and played on both sides of the market without taking long positions on any of the counters.

Leading floor brokers, expects some improvement in the market’s current stance as board meetings of some of the leading companies including urea giants such as Engro Chemicals, Fauji Fertilizer and many others are due during the current week.

The board of directors of the PSO met here yesterday (Oct 23), but till late in the evening there was no official word on the rumoured interim dividend but a modest decline in its share value shows there was no positive announcement from the company sources on the issue.

“The market needs fresh stimulants including fresh money to boost investor morale dampened by the political standoff,” analysts said and “until leading investors decide to break the bearish cycle, bears are eying the index level of 3,500.”

Owing to steep increase in lint cotton prices to Rs4,240 per 40kg including 15 per cent sale tax, the weakness of the textile sector is progressively engulfing the entire market for obvious reasons, they said.

Being one of the largest sectors of listed companies it influences the market in more than one ways but mostly on the lower side,” they add.

Bulk of the selling remained confined to leading shares, notably PSO, PTCL, Engro Chemical, ICI Pakistan and Pakistan Oilfields. Some other blue chips rose modestly under the lead of Hub-Power, FFC-Jordan Fertilizer and Sui Northern Gas.

Banks shares showed modest rise, while the market decline was led by the energy sector as leading shares fell on renewed selling. Auto shares ruled mixed, with the exception of Al-Ghazi Tractors, whose directors have announced an interim dividend of 100 per cent. Its 10-rupee share already ruling 17-time higher against its face value stayed firm at Rs174 after hitting the day’s lowest and highest at Rs171 and Rs174.50.

Prominent gainers were led by Askari Bank, Jahangir Siddiqui Bank, Lawrencepur Woollen, Ahmed Hassan Textiles and Clariant Pakistan, which posted gains ranging from Rs3.10 to Rs7.75. Unilever Pakistan was marked up by Rs44 on active support at the previous lower levels.

Losers were led by Attock Refinery, Pakistan Oilfields, Pakistan Refinery, Millat Tractors, Aventis Pharma, Century Papers, Ferozsons Lab and Pakistan Services, off Rs3 to Rs5.85.

Trading volume showed a modest rise at 197m shares as compared to 162m shares a day earlier as losers maintained a modest lead over the gainers at 159 to 116, with 32 shares holding on to the last levels.

Hub-Power topped the list of most actives, up 10 paisa at Rs35.75 on 31m shares followed by PSO, easy, 40 paisa at Rs263.60 on 19m shares, Pakistan PTA, off 70 paisa at Rs12 on 18m shares, FFC-Jordan Fertilizer, higher by 50 paisa at Rs17.45 on 15m shares, and Sui Northern Gas, higher by Rs1.40 also on 15m shares.

Other actives were led by DG Khan Cement, up 55 paisa on 12m shares, National Bank, steady 10 paisa on 10m shares, Pakistan Oilfields, off Rs3.95 on 9m shares, Dewan Salman,lower 70 paisa on 8m shares, ICI Pakistan, off 80 paisa on 5m shares.

FORWARD COUNTER: PSO again led the list of actives on this counter, lower 25 paisa at Rs264 on 11m shares, Hub-Power, up 10 paisa at Rs35.75 on 6m shares, PTCl, easy 15 paisa at Rs33.80 also on 6m shares, FFC-Jordan Fertilizer, up 40 paisa at Rs17.45 on 4m shares and Pak PTA, off 75 paisa at Rs12 on 3m shares.