KARACHI, April 20: Stocks on Wednesday staged a late recovery in response to an end of standoff on the Carryover Trade (COT) issue after the authorities accepted the KSE proposals of its phasing out for the next three months, but the rally was too feeble to suggest that the worst is over.

The market reaction to the end of COT issue, though positive, was well below analysts’ expectations as leading investors stayed on the sidelines most of the time, awaiting fresh developments on the capital market.

“The KSE 100-share index should have recovered at least 300 points after the reports of approval of the phasing out plan by the SECP,” the analysts said. “But a modest recovery of 78.11 points at 7,030.83 reflects that investors are still uncertain about the future direction of the market.”

After having fallen earlier by 250 points, the index has good reason to respond to its technically oversold position. Some analysts predict the market could resume its upturn, but others advised a “wait and see” policy until the market settles down on some viable level.

The extension in COT trade should have boosted the market beyond any limits as it did at the fag-end of the last week on rumours. Investors still seem to be in two minds before going all-out for a big kill in the absence of leading bargain-hunters.

It goes to the credit of PTCL alone to put the market back on the rails as some of the leading institutional traders and brokers are of the view that it is a good buy around the current levels.

The opening was, however, terribly violent as investors and some financial institutions continue unloading long positions what the dealers called an extension of the spillover of overnight selling.

The KSE 100-share index was initially down by 250 points but managed to show a modest recovery on late heavy buying in the leading base shares, notably PTCL, OGDC, PSO and Pakistan Oilfields, which together hold a weightage of about 50 per cent in it.

The early steep decline indicates that the investors are unsure about the future direction of the market and mostly played safe, especially on the risk-free counters, brokers said.

Going by market’s technical demands being in a highly oversold position it could rise beyond the index level of 8,000 provided the investors and financial institutions resume normal trading activity, they said.

Parke-Davis added another Rs64 to the overnight total followed by Shell, which rose by Rs37.40 amid rumours of higher dividend to be announced in its board meeting. Other good gainers were led by IGI Insurance, Javed Omer, Attock Refinery, Pakistan Refinery, Suzuki Motors and Atlas Honda, which posted gains ranging from Rs9.25 to Rs19.85.

Losers included AKD Securities and Wyeth Pakistan, off Rs15.70 and Rs20, respectively, followed by Indus Dying, Glaxo-SKF, Gatron Industries, and PPL, which suffered a fall of Rs5 to Rs8.70.

Trading volume rose to 264m shares as compared to 179m shares a day earlier, as gainers managed to hold a modest edge over losers at 162 to 138, with 28 shares holding on to the last levels.

PTCL led the list of actives, up Rs3.25 at Rs60.50 on 112m shares followed by National Bank, lower 95 paisa at Rs95 on 18m shares, OGDC, up 55 paisa at Rs93.25 on 17m shares, DG Khan Cement, easy 55 paisa at Rs59.50 on 14m shares, Pakistan Oilfields, higher by Rs1.95 at Rs275.80 on 12m shares and PSO, higher by 90 paisa at Rs361 on 10m shares and MCB, up Rs1.05 at Rs68 on 9m shares.

Other actives included Pak PTA, firm by 20 paisa on 9m shares, Fauji Fertilizer Bin Qasim, steady by 10 paisa on 8m shares and Sui Northern Gas, higher by Rs2.10 on 7m shares.

FORWARD COUNTER: PTCL was also actively traded on the forward counter where it rose by Rs3.30 at Rs60.80 on 21m shares followed by Pakistan Oilfields on reports of higher profits, higher by Rs1.50 at Rs275.10 on 4m shares, PSO, off 90 paisa at Rs361.35 also on 4m shares.