KARACHI, Aug 1: The 0.5 per cent increase in discount rates to 10 per cent halted the share market’s upward drive on Wednesday as investors took profits on the perception that the costly borrowing would push up the production cost, analysts said.

A leading analyst was however of the view that the hike may not prove a major depressant as far as the share business was concerned as it was largely operates under the CFS regime.

But reports that some of the leading companies had been permitted by New Delhi to export cement to the Indian companies neutralised the negative impact of interest rate hike on the share business for the near-term, they said.

Barring Lucky Cement, one of the leading exporters, which suffered sharp fall of Rs2.40 at Rs127.80 on below market expectations cash dividend for the last year, the other two beneficiaries came in for active support and ended higher.

This perception was also reinforced by the KSE 100-share index, which early after having risen by about 100 points on spillover of the overnight run-up, later finished with a decline of 49.97 points at 13,688.90 as compared to 13,738.87 a day earlier. The KSE 30-share index also fell by 109.65 points at 16,508.52.

The market witnessed a dividend galore but they came at time when investors were preoccupied with some immediate depressant, notably the interest rate hike, said a leading broker.

While some of the leading base shares came in for active selling at the inflated levels under the lead of PTCL, Bank of Punjab and some others second-liners mostly in the cement sector finished with fresh good gains.

“The market is in the process of consolidation phase in anticipation of higher dividend and could attain its index level of 14,000 points shortly after the confusion created by “deal or no deal” fades out,” said a leading broker.

Some of the foreign investors are back in the market and are expected to enhance their daily share intake on selected counters, which in turn will generate sympathetic buying on the other counters, he added.

Leading gainers were led by JS & Co and EFU Life Assurance, up by Rs38.35 and Rs15, followed by Pak-Suzuki Motors, Tri-Pack Films, Merit Packaging, on post-dividend buying, Unilever Pakistan, Pakistan Oilfields, EFU General and Javed Omer, which rose by Rs6.05 to Rs10.85.

Attock Petroleum and Siemens Pakistan were among the top losers, off by Rs13.30 and Rs84. Other notable losers were led by Central Insurance, IGI Insurance, Sapphire Textiles, Pakistan Tobacco, Shell Pakistan, Millat Tractors, Exide Pakistan, Sitara Chemicals, AKD Securities, United Bank and Arif Habib Ltd, which suffered fall ranging from Rs5 to Rs12.20.

Trading volume showed a modest rise at 274m shares from the previous 266m shares but losers held a fair lead over the gainers at 178 to 150, with 44 shares holding on to the last levels.

Lucky Cement topped the list of actives, off Rs2.40 at Rs127.80 on 21m shares, followed by Bosicor Pakistan, up by Re1 at Rs20.45 on 20m shares, Fauji Cement, firm by 65 paisa at Rs21.45 on 18m shares, D.G. Khan Cement, higher by Rs3.50 at Rs113.20 on 18m shares, Pakistan Cement, higher by 95 paisa at Rs14.60 on 12m shares Maple Leaf Cement, up by Rs1.10 at Rs23.85 on 10m shares and PTCL, lower by 45 paisa at Rs58.50 on 10m shares.

Other actives were led by TRG Pakistan, steady 45 paisa on 17m shares, Arif Habib Securities, up by Rs1.75 on 12m shares and Pakistan Oilfields, higher by Rs6.95 on 8m shares.

FORWARD COUNTER: Lucky Cement also came in for active selling on the cleared list and was marked down by Rs2.35 at Rs129 on 10m shares, followed by Habib Bank, higher by Rs11 at Rs325 on 9m shares and D.G. Khan Cement, up by Rs3.35 at Rs113.80 on 7m shares.