KARACHI, Jan 23: The KSE 100-share index on Wednesday crossed the psychological barrier of 1,500 points followed by heavy buying triggered by reports of one per cent cut in discount rates.

Investors virtually flooded the market on the perception that the cut in discount rate from 10 to nine per cent could well mean cheaper funds for investment both for the corporate and industrial sectors, adding to the manoeuvring power of those who are in the share business.

The KSE 100-share index settled slightly above the 1,500 point level at 1,501.07 as compared to 1,464 a day earlier, up 37.07 points or 2.55 per cent. It also briefly breached the barrier a couple of weeks earlier but failed to sustain it.

“It was a classic move by the State Bank to add its bit to the developing economic scenario and strong basic fundamentals,” stock analysts at the W.E. Financials, commenting on one per cent cut in the discount rate said, adding “easy supply of funds at cheaper rates could add to the prevailing buying euphoria in coming weeks.”

The impact of the rate cut and some other bullish economic indicators was so strong that the market was not inclined to entertain bearish impact of the fallout of Kolkata firing incident.

It was a remarkable performance judged by any standard, including the news from the border, where tension is claimed at the highest pitch as the market chose to be guided by the economic fundamentals rather than external depressants.

“Whether or not it could sustain the recently achieved index level will essentially determine the market’s future direction,” stock analysts at the AHRL predict, adding “the developing economic scenario, however, points that may be not the end of the current rally.”

Apart from the perceptions of an economic prosperity, inflow of foreign direct investment and higher corporate profits, steep increase post-tax profit at Rs8.501 billion on interim sales of over Rs31 billion and an identical performance by some other pivotals, notably Engro Chemical also aided the sentiment.

According to market sources, the board meeting of Engro Chemical has been advanced to end of January instead of early March. The report was well-received as is evident by an increase of Rs1.45 in its share at Rs60.10.

The market advance was led by the energy sector and most of the leading MNCs, leading gainers among them being PSO, Shell Pakistan, Al-Ghazi Tractors, Lever Brothers and Pak Reinsurance, which posted gains ranging from Rs3 to Rs27.

Others to follow them were Adamjee Insurance, Prime Bank, Alico, Sapphire Textiles, Noon Sugar, Engro Chemical, Treet Corporation, Tri-Pack Films and Packages, which posted gains ranging from Rs1.45 to Rs2.80.

Losses on the other hand were fractional, barring EFU Life, Dominaion Stocks, Abbott Lab and National Refinery, which fell by one rupee to Rs1.35.

Trading activity, therefore, further expanded to 184 million shares from the previous 150 million shares as 139 shares rose and 56 fell, out of 258 actives.

Hub-Power again led the list of actives, up 75 paisa at Rs21.85 on 76m shares, followed by PTCL, higher 50 paisa at Rs16.95 on 33m shares, Sui Northern, firm by 40 paisa at Rs11.40 on 13m shares, Engro Chemical, higher Rs1.45 at Rs60.10 on 9m shares and PSO, up Rs3.15 at Rs96.40 on 7m shares.

Other actives were led by Adamjee Insurance, up Rs2.65 on 6.621m shares, Nishat Mills, higher 35 paisa on 6.621m shares, ICI Pakistan, higher Rs1.25 on 5.430m shares, MCB, firm by 90 paisa on 3.939m shares and KESC, up 45 paisa on 3.163m shares.

FUTURE CONTRACTS: Bullish conditions were also witnessed on the forward counter where ICI Pakistan, Engro Chemical and PSO came in for active support and were marked up by Rs1.15, 1.49 and Rs2.60, respectively, at 44.40, 60.30 and 96.60, respectively.