KARACHI, July 20: Stocks on Wednesday shrugged off the last two session’s sluggishness as some of the bulls were back in the market and covered positions in leading oil shares at the lower levels but there was no matching selling from any quarter.

But the falling daily volumes reflect investors may not resume normal moping operations until the COT issue is resolved, and the market has enough liquidity at cheaper rates for smooth functioning of the share business.

Some positive developments on the COT issue and perception that an upward revision of one to two per cent on national saving schemes’ profit rates may not have negative impact on stock trading was said to be another supporting factor behind the snap rally.

After having fallen over 200 points during the last two sessions, the KSE 100-share index recovered 91.21 points at 7,410.98 as compared to the previous 7,319.77, as all the leading base shares rose under the lead of OGDC, which has 22 per cent weightage in it.

Bulk of short-covering remained confined to the leading oil shares at the lower levels, which together have a weightage of about 40 per cent in it.

Essentially, the market derived its strength from the market thinking that the COT issue will be resolved amicably after the liquidity problems are solved on the recommendations of Train committee.

Analysts said one to two per cent increase in profit rates on National Saving Schemes may not drain out funds from the share business as dividend combined with capital appreciation is still higher than them.

Similarly, it will not hurt the deposit base of banks and welcomed the long-awaited upward revision to match the rates of T-bills and other modes of investment.

The Train committee formed to find out the causes of recent market fall has initially said it may be the conflict of interest among the big ones but opted for a detailed investigation of the COT issue and its impact on the stock trading. It will also assess the daily financing needs of the market and how to meet that demand through various sources, including margin financing.

“I think the government has decided to sort out the problems of investors and restore the image of the KSE as the best performing market in the world,” says an analyst. “The committee is expected to come out with an impartial investigation report of the entire issue.”

There is nothing wrong with the basic fundamentals as some “vested interests” are out to shake the investor confidence in the market.

The bulls seem to have entered the market with a mission and are inclined to do business at the attractively lower levels that most of blue chips have reached during the recent sell-off.

Plus signs dominated the list under the lead of Rafhan Bestfoods and Wyeth Pakistan, up Rs14.50 and Rs18.25, respectively, followed by EFU General, Attock Refinery, Attock Petroleum, Pakistan Petroleum, Pakistan Oilfields, PSO and Shell Pakistan, which posted gains ranging from Rs4 to Rs14.

Prominent losers were led by United Sugar and Mari Gas, off Rs7 and Rs8.50, respectively. Others were marked down by Rs2.45 to Rs4 for Husein Industries, Artistic Denim, Pakistan Tobacco, and Thal.

The trading volume again shrank to 118m shares from the Tuesday’s 138m shares but gainers forced a strong lead over losers at 194 to 75, with 47 shares holding on to the last levels.

OGDC was actively traded, up Rs1.50 at Rs105.60 on 15m shares, followed by PTCL, steady by 35 paisa at Rs62.45 on 13m shares, National Bank, up 50 paisa at Rs108 on 12m shares, Fauji Fertilizer Bin Qasim, lower 45 paisa at Rs29.45 on 11m shares, Pakistan Oilfields, higher by Rs6.50 at Rs306.70 on 7m shares.

MCB, led the list of other actives, up Rs4 at Rs84.20 on 6m shares, PSO, higher by Rs8.05 at Rs380.95 and Pakistan Petroleum, firm by Rs6 at Rs186.25 on 5m shares, DG Khan Cement, lower 35 paisa on 9m shares and Bank of Punjab, higher by Rs1.85 on 3m shares.

FORWARD COUNTER: Pakistan Petroleum, which has been under pressure for the last one week, was actively traded on its privatization news, up Rs5.60 at Rs187 on 11m shares followed by Fauji Fertilizer Bin Qasim, easy 30 paisa at Rs229.40 on 8m shares and OGDC, higher by Rs1.90 at Rs106.15 on 7m shares.