KARACHI, June 28: Stocks on Tuesday recovered from the previous lows on active short-covering in leading oil shares and PTCL triggered by rumours that the cut-off date of badla financing is being extended beyond Aug 26. The KSE 100-share index was up by 176.36 points or 2.43 per cent at 7,431.80

But bulk of buying was confined to a dozen leading shares, notably in the oil sector and therefore lacked normal depth and the sustainability of the snap rally is doubted by many analysts.

But some others said if the cut-off date was extended, there could be a lot of covering purchases in the coming sessions and the index may hit the level of 8,000 in the process.

The KSE 100-share index recovered 176.36 points or 2.43 per cent at 7,431.36 as compared to 7,255.44 a day earlier as all the leading base shares, notably OGDC, Pakistan Petroleum, PTCL, and PSO rose on reports of higher world crude oil prices and National Bank showed smart recoveries on strong buying. It breached through the two consecutive barriers of 7,300 and 7,400.00 just in one go, reflecting the strength of leading base shares.

Although there was no official word on the strong rumour circulating in the market, some analysts said the continued decline in the share values during PTCL’s post-privatization sessions worried KSE high-ups and the SECP bosses and they may have decided to give a boost to the market in the form of extension of cut-off date for phasing out of badla.

Badla or Carryover Trade (COT) to be replaced by margin financing in June but owing to steep decline in the market the date was extended up to Aug 26 and in between investors were allowed to square positions at the rate of 8.25 per cent each month.

“No one appears to be happy with the phasing out of badla, a decades old stock investment mode of trading as access to bank margin financing may not be that easy by each brokerage house and hence allied problems”, analysts said.

In early trading, PTCL was pushed as lower as Rs60.70 as vested interests targeted it after having spread baseless rumours that the Etisalat has backed out of its commitment to have a stake in PTCL at $1.96 per share.

However, steep decline in the share value of PTCL in post-privatization sessions is not warranted by the objective background news and signals some negative manoeuvring by some speculators, brokers said.

But the rumour of extension of cut-off date of badla financing seem to have given the needed push to an ailing market after evoking a lot of short-covering in the leading base shares.

“The market appears to be in the tight grip of rumour-mongers who take a ride on the side of their choice, which in a way reflects its weak base”, analysts said adding “no one is inclined to operate in line with the positive basic fundamentals including fiscal incentives in the budget and higher corporate dividend”.

Plus signs forced a strong lead over the minus ones under the lead of Atlas Honda and Shell Pakistan, up by Rs14 and Rs18.10 respectively. Other good gainers included ICI Pakistan, Attock Refinery, EFU Life, Artistic Denim, National Refinery, PSO, Mari Gas, Pakistan Cables, Pakistan Services and Colgate Pakistan, up by Rs3.75 to Rs9.25.

Arif Habib Securities and Parke-Davis fell by Rs8.95 and Rs59 followed by HinoPak Motors, Haroon Oils, National Foods and Gatron Industries, which suffered fall ranging from Rs4 to Rs8.70.

Trading volume showed a modest rise at 210m shares from the previous 119m shares as losers trailed far behind gainers at 99 to 187, with 30 shares holding on to the last levels.

OGDC topped the list of most actives, up by Rs3.90 at Rs107.25 on 69m shares followed by PTCL, higher by Rs2.75 at Rs63.85 on 53m shares, National Bank, firm by Rs1.35 at Rs105.85 on 16m shares, Pakistan Petroleum, higher by Rs4.05 at Rs216.05 on 13m shares, PSO, up by Rs6.30 at Rs678.80 on 10m shares, Pakistan Oilfields, higher by Rs6.30 at Rs281.75 on 8m shares and Attock Petroleum, firm by Rs3.35 at Rs159.85 on 3m shares.

Other actives were led by Bank of Punjab, up by 65 paisa on 5m shares, D.G. Khan Cement, higher by Re1 on 4m shares, and Lucky Cement, higher by 60 paisa on 3m shares.

FORWARD COUNTER: Pakistan Petroleum was actively traded and led the list of actives, up by Rs3.65 at Rs220.40 on 16m shares followed by PTCL, higher by Rs2.25 at Rs64.75 on 16m shares and OGDC, up by Rs2.55 at Rs107.95 on 12m shares.