KARACHI, Jan 25: Stocks on Wednesday shrugged off the overnight easiness as investors covered positions at the lower levels on selected counters amid a good bit of speculative activity in some overvalued shares.

The notable feature was that the market witnessed a major shift in investor buying strategy, most of whom made an active covering purchases in low-priced shares, notably TRG Pakistan, Fauji Cement and PIAC, while overvalued oil, auto shares came in for renewed profit-selling.

Trading volume, however, showed a sharp contraction apparently reflecting an outflow of funds from the market to the Bank of Khyber, which opened for public subscription for three days. Its Rs15 per share, including premium, is being sold in 500-share lots. On the forward counter its share is quoted around at Rs35.

The KSE 100-share index managed to cover a good part of the overnight fall at 10,214.01, up 43.61 points from the overnight 10,170.40, reflecting the strength of leading base shares. It showed an erratic movement within 175 points, which reflects that its further upward drive is still not warranted by the fundamental market statistics, reflecting its overbought position, brokers said.

Although rolling of positions from the matured January contracts to the newcomer February settlements, notably in leading shares, such as PSO and Pakistan Oilfields, did take their toll, and strong speculative buying at the lower level coupled with genuine short-covering saved the situation. Analysts said unlike the previous months, the rolling of positions was expected to be fairly smooth as in most cases leverages had not assumed that alarming proportions.

“But the chief factor behind the snap recovery appears to be rumours of an advent of foreign buying, as it will allow investors an extensive manoeuvring leverage in the coming weeks,” leading stock analyst Hasnain Asghar Ali said.

An average daily volume of over half a billion shares needs more funding beyond the existing level capped at Rs25 billion and in turn could add to the existing bull-run in the coming weeks, he added.

He said corporate announcements due before the month were out and expected to be on the higher side of analysts’ predictions and could evoke a lot of covering purchases on those counters.

Leading gainers were led by Colgate Pakistan and Dawood Hercules, up Rs14.45 and Rs20, respectively, followed by Thal Corporation, National Bank, MCB, Clariant Pakistan, Dreamworld and Engro Chemical, which posted gains ranging from Rs4.80 to Rs8.50.

Prominent losers included Unilever Pakistan and Wyeth Pakistan, off Rs24 and Rs40, respectively. Other notable losers included Arif Habib Securities, PSO, International Industries, Atlas Honda, Gillette Pakistan and Shell Pakistan, off Rs9 to Rs15.

Trading volume fell to 392m shares from the previous 492m shares owing partly to rolling of forward positions, as losers maintained a slight edge over gainers at 177 to 171, with 39 shares holding on to the last levels.

A low-priced TRG Pakistan led the list of actives, reflecting investors preference for those shares which ensure higher capital gains, up 90 paisa at Rs15.60 on 33m shares, followed by National Bank, higher by Rs5.40 at Rs236.25, PIAC, higher by one rupee at Rs13.70 on 24m shares, Fauji Cement, firm by 70 paisa at Rs24 also on 24m shares, OGDC, steady 35 paisa at Rs124.35 on 23m shares, Bosicor Pakistan, higher by Rs1.35 at Rs28.70 on 21m shares, and PTCL, lower 15 paisa at Rs66.25 on 16m shares.

Other actives were led by DG Khan Cement, up Rs1.70 on 18m shares, Telecard, higher by one rupee on 16m shares, and Bank of Punjab, up Rs2 on 15m shares.

FORWARD COUNTER: National Bank came in for renewed support and was quoted higher by Rs5.73 at Rs236.80 on 10m shares, its February contract also rose by Rs6 at Rs237, followed by Telecard, higher by one rupee at Rs20.85 on 9m shares, its February settlement also rose by the same amount at Rs21.05 and MCB, up Rs4.25 at Rs191.70 on 6m shares.