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| April 17, 2006 | Monday | Rabi-ul-Awwal 18, 1427 |
Index consolidates above 12,000 points
THE KSE 100-share index consolidated well above the crucial level of 12,000 points during the holiday-shortened week. Analysts predict that it could well prove a takeoff point for its forward thrust to its next widely speculated target of 15,000 points.
There could be a number of technical corrections after each rise but the massive buying in leading oil, bank and cement shares on the strength of higher corporate interim profits could trigger buy-stops at lower levels.
It went to the credit of leading stocks which managed to avert a major post-blast shakeout as leading institutional traders and bargain-hunters targeted base shares as confidence-building measure for investors and kept the bears out of the market.
The KSE 100-share index finished with a fresh rise of 200.33 points at 12,136.83 as compared to previous 11,936.59 points followed by heavy fresh buying in leading oil shares, notably the Pakistan Oilfields, the Pakistan Petroleum and the OGDC.
But the underlying sentiment was highly shaky as general investor was not inclined on taking new positions until the current state of uncertainty and the tension were defused by some official steps.
However, the KSE 100-share index managed to consolidate well above the recently attained level of 12,000 points on the strength of fresh covering purchases aided by reports of higher interim corporate earnings.
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Next week could be very crucial for future market direction as by that time the prevailing tension is expected to be defused, an analysts said adding that if there was a violent reaction after the three-day ultimatum given by a religious party there could be some major shakeout.
After an initial massive fall of 175 points in the backdrop of Tuesday’s incident, the KSE 100-share index on Thursday managed to post fresh rise of 68.50 at 12,060.73 points on late support in leading base shares.
But the sentiment was terribly nervous on the perception that the inspired support could leave the market any time leaving behind a large list of causalities, some brokers feared.
I think the Tuesday’s bomb attack wiping out the top leadership of a moderate religious party and many others on Eid Milad-un-Nabi’s congregation is not a simple matter. It could have serious political implications in the sessions to come, said a leading stock analyst.
Some others predict higher quarterly payouts due during the next couple of weeks could keep investors in a positive mood and ruled out the possibility of any major shakeout.
Although, the broader market stayed weak, some heavyweights on oil counter, notably the OGDC, the Pakistan Oilfields and the Pakistan Petroleum came in for active local support at falling prices after some foreign investors unloaded in part, their long positions.
There is a scare among foreign investors on the developing law and order situation but leading among them awaited the outcome of inquiry initiated by the government to pinpoint suicide bombers, analysts said.
Analysts said that they have a big stake in the market, though on selected counters and would think twice before unloading hastily which could save the market from an impending crash.
However, the negative fallout of city killings was partly eased by the KSE shutdown on Wednesday and partly to some improvement in the law and order situation. Major markets and shopping centres remained closed in response to the three-day mourning call by the religious parties.
The PTCL responded positively to reports of taking over of the administrative control by the Dubai-based Etisalat but finished well below the day’s peak of Rs68.35.
FORWARD COUNTER: Most leading but speculative issues also finished with sharp gains in sympathy with their ready counterparts. Major gainers among them being Pakistan the Pakistan Oilfields, the Pakistan Petroleum, the National Bank, the OGDC, the D.G. Khan Cement and several others.—Mohammad Aslam
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