KARACHI, Sept 30: Stocks on Tuesday resisted fresh decline as institutional traders covered positions on selected counters at the lower levels but the underlying sentiment remained mixed owing to the absence of retailers. The KSE 100-share index managed to recoup 40 points from the massive erosions.

Opinions are, however, divided over the future direction of the market as the covering operations were mostly confined to the institutional traders, while others watched the situation from the outside.

Investors, notably retailers most of the time stayed on the sidelines and generally played safe despite good dividend announcements apparently awaiting further developments on the corporate front.

Active short-covering in some leading textile, fertilizer, and oil giants, notably PSO and Shell Pakistan in anticipation of an upward revision in fortnightly petroleum prices led the market resistance to further declines.

After moving either-way, the KSE 100-share index finally managed to finish modestly higher above the important level of 4,000 points at 4,027.34, up 39.74 points on the strength of leading base shares, notably PTCL and PSO.

“I presume bulls have in mind the index level of 4,000 on the lower side and 4,500 on the higher and intend to play in between at least for the near-term”, predicts a leading stock broker “I don’t think it has the appetite to fall below this level owing to the relative strength of the corporate sector, higher dividend and EPS.

The progressive increase in interest rates on the government bonds and treasury bills is welcome but they could not absorb the entire floating liquid money, while stocks have the capacity to have it, he said.

“Fears that the Rs50 billion bonds to be issued during the next three months could cause outflow of funds from the share market are unfounded as investors have their own investment perceptions”, he adds.

Trading volume also rose from the overnight meagre total of 140m shares to 271m shares but was still far below the average daily total of 450m shares.

Analysts said the last two weeks massive sell-off, which eroded 600 points or Rs100 billion from the market capitalization has badly shaken the investor confidence in the share business and they are in search of new investment avenues.

Whether or not the revival of institutional support at the current lower levels will reinforce retailers confidence in the market’s ability to rise above the current lower levels will be seen during the next couple of sessions, they say.

Leading gainers were led by EFU General and Life Insurance, Shell Pakistan, Shahtaj Sugar, Packages, Tri-Pack Films, Clover Pakistan, Ghani Glass, after the announcement of a good dividend of 15 per cent plus bonus shares of 35 per cent, Unilever Pakistan, Grays of Cambridge, AKD Securities and PSO, which posted gains ranging from Rs4.20 to Rs15.

Losers were led by Jahangir Siddiqui & Co, BOC Pakistan, Glaxo-SKF, Atlas Honda, National Refinery and Pakistan Refinery, off Rs4.15 to Rs8.55, the largest decline of Rs31.05 being in Javed Omer.

Trading volume rose to 271m shares from the overnight meagre total of 140m shares but losers maintained a fair lead over the gainers at 183 to 136, with 22 shares holding on to the last levels.

PTCL topped the list of most actives, up by Rs1.05 at Rs37.75 on 65m shares, followed by PSO, sharply higher by Rs12.95 at Rs278.50 on 25m shares, Fauji Fertilizer, up by 10 paisa at Rs10.10 on 16m shares, KESC, after the news of sell-off of its 73 per cent shares, higher by 85 paisa at Rs7.35 on 16m shares and Sui Northern Gas, up by Rs1.65 at Rs37.50 on 14m shares.

Other actives were led

by FFC-Jordan Fertilizer, easy five paisa on 13m shares, Pakistan Oilfields, off Rs2.05 also on 13m shares, National Bank, up by 60 paisa on 11m shares, D.G.Khan Cement, lower by Rs1.05 on 10m shares and Hub-Power up by 40 paisa on 6m shares.

FORWARD COUNTER: PSO came in for strong support at the lower levels and recovered Rs9.75 at Rs280.50 on 18m shares followed by PTCL, higher by Rs1.05 at Rs37.75 on 17m shares, Hub-Power, up by 80 paisa at Rs35.85 on 10m shares, ICI Pakistan, steady by five paisa at Rs77.75 on 1.184m shares and Sui Northern Gas, higher by Rs1.25 at Rs37.60 on 1m shares.