KARACHI, Feb 1: Stocks on Friday came in for modest pruning on selling triggered by an increase of 50 basis points in the discount rate to 10.50 per cent by the central bank, but larger fall was averted thanks to presence of support at dips.

After initial rise on active follow-up support, the KSE 100-share index finished with a modest fall of 42.60 points at 13,974.41 as compared to 14,017.01, a day earlier. It hit the session’s high at 14,057.39 and low at 13,956.89 points. The free float 30-share index was off 29.89 points at 16,666.03.

The leading shares that came in for weekend selling were led by OGDC, Engro Chemical and some others, but the fall was modest on stray selling. Fresh covering purchases in the MCB Bank averted major decline in the index. It ended with a gain of Rs3.40 at Rs391.90 on 5m shares.

“The central bank move may contain the rate of inflation within the current limits and may not disturb the economic growth rate projections of 6.5 to 7 per cent, but it will certainly increase the cost of borrowing having negative impact on the share business,” analyst Ahsan Mehanti fears.

Stock analyst Hasnain Asghar Ali observed that the negative fallout of the hike in discount rate was already absorbed by the market as the SBP had hinted more than once about its likely move to contain the monster of inflation.

Extremely narrow movements by the KSE index also reflected that investors did not take it a major market depressant at least for the near-term and its fuller reaction was expected to be visible in next week’s trading, he added.

“The bulls are out to keep the market in their tight grip basing their future capital gains perceptions on the upcoming dividend announcements,” Ashraf Zakaria says, adding “some other corrective steps being taken by the SECP including the introduction of CFS Mark-II during the current month may overshadow the negative impact of discount rate hike”.

It was perhaps why despite weekend profit-selling by weakholders and jobbers, the instances of panic-selling were lacking from any quarter.

Leading gainers were led by Siemens Pakistan, Bata Pakistan, up by Rs37 and Rs28 followed by Central Insurance, Sanofi-Aventis, Clariant Pakistan, National Foods, BOC Pakistan, Hino Pak, AKD Capital and JS Global, which posted gains ranging from Rs7 to Rs23.15.

Losers were led by Rafhan Maize, JS & Co, Attock Petroleum, Packages, Indus Motors, Clover Pakistan and Arif Habib Ltd, off by Rs6 to Rs9.60.

Trading volume was sharply lower from the overnight levels at 130m shares and losers held a modest lead over the gainers at 166 to 141, with 34 shares holding on to the last levels.

Attock Refinery came in for modest fresh support and rose by Rs1.15 at Rs276.25 on 7m shares followed by OGDC, lower by 35 paisa at Rs119.50 also on 6m shares and Engro Chemical, sharply lower by Rs3.40 at Rs.288.80 also on 6m shares.

Dewan Salman, up by 15 paisa at Rs8.15 on 5m shares, NIB Bank, easy by five paisa at Rs22.65 on 5m shares and Sitara Peroxide, higher by Rs1.75 at Rs62.50 on 4m shares.

Bosicor Pakistan, led the list of other actives, lower 25 paisa at Rs21.50 on 4m shares followed by Azgard Nine, off Rs1.60 at Rs52.80 on 4m shares and Pace Pakistan, steady by 20 paisa at Rs32.35 on 3m shares.

FORWARD COUNTER: MCB led the list of actives on this counter, up by Rs2.75 at Rs391.50 on 4m shares followed by Engro Chemical, off Rs3.60 at Rs289.25 on 3m shares and Dewan Salman, up by 15 paisa at Rs8.20 on 2m shares.