KARACHI, Aug 27: Stocks on Wednesday recovered from the previous lows followed by active short-covering but failed to sustain the day’s best levels under the cross-current of alternate bouts of buying and selling. The KSE 100-share index recouped in part the previous losses, up 34.40 at 4,376.60 points.
The underlying sentiment remained highly shaky as investors were not sure about the future direction of the market owing to negative news from the political front, notably rigid positions taken by the contenders on the LFO.
The President’s remarks in Hyderabad “no LFO no parliament” and Indian minister’s statement on the Mumbai blasts linking religious groups having ties with their counterparts in Pakistan did take their toll initially but generally ignored later, analysts said.
The market’s bullish response to some basic positive fundamentals is also reflected in the smart recovery of the KSE 100-share index, which recovered 34.40 points at 4,376.60. At one stage, it broke the barrier of 4,400 at 4,402.21, but later selling pushed it down.
The interesting feature was that the index recovered sans further decline in PTCL and Hub-Power, which hold a weightage of 43 per cent in it. It shows the strength of the broader market and those having more potential to rise further, brokers said.
Energy and auto shares, which had received massive battering during the last two sessions, led the market recovery thanks to active covering purchases at the lower levels. Cement shares followed and so did some of the leading shares, including Dewan Salman, Telecard and many others in textile and insurance sectors.
PSO also recovered from the early lows on rumours about the announcement of its final bidding date by the Privatization Commission. However, the falling daily volumes signals some reservations on the part of big ones and partial withdrawal of foreign buying, of course, after having cashing in on the available margins of profits.
It appears those who have close links with the Islamabad high-ups may have found the cue leading to future political events and are playing safe, with a half of the average daily turnover.
“The rigid positions taken by the opposition and the government on the LFO and continued uproar in the National Assembly could take an ugly turn any time,” fears a leading stock analyst.
After two lean sessions, plus signs dominated the list under the lead of Lakson Tobacco, Aventis Pharma, Al-Ghazi Tractors, Shell Gas and Parke-Davis, which posted gains ranging from Rs8 to Rs20.
Other good gainers were led by Central Insurance, Gatron Industries, Indus Motors, Pak-Suzuki Motors, Packages, Shezan International, Dreamworld and Clover Pakistan, up Rs5 to Rs7.45.
Losses on the other hand were mostly fractional barring HinoPak Motors, Security Papers, Mehmood Textiles, Kohat Cement, International Industries, IGI Insurance and Siemens Pakistan, off Rs2.50 to Rs20.
Trading volume shrank further to 385m shares from the previous 451m shares, but the advancing shares forced a strong lead over the losing ones at 215 to 155, with 48 shares holding on the last levels.
PTCL was actively traded but on the lower side, easy by another 10 paisa at Rs38.20 on 59m shares, Fauji Cement, lower five paisa at Rs13.45 on 40m shares, Hub-Power, off 15 paisa at 43.25 on 33m shares, Dewan Salman, up 45 paisa at Rs24 on 25m shares and PIAC, easy 15 paisa at Rs20.05 on 24m shares.
Other actives were led by PSO, higher by Rs4.85 on 22m shares, Pak PTA, higher 65 paisa on 21m shares, Pakistan Oilfields, up Rs3.80 on 17m shares, Japan Power, off 40 paisa on 12m shares and FFC-Jordan Fertilizer, higher 45 paisa also on 12m shares.
FORWARD COUNTER: PSO also led the list of actives on the forward counter and rose by Rs4.80 for the August settlement at Rs288.40 on 7m shares followed by PTCL, easy five paisa at Rs38.30 on 5m shares, Hub-Power, lower 15 paisa at Rs43.30 on 4m shares, Sui Northern Gas, off 55 paisa at Rs45.45 on 2m shares and Dewan Salman, up 40 paisa at Rs24.05 also on 2m shares. September settlements also followed the lead of ruling August contracts.
DEFAULTER COMPANIES: Standard Bank came in for strong support and rose sharply by Rs1.50 at Rs9 on 4.284m shares followed by Suzuki Motors, higher by Rs1.50 at Rs14.25 on 0.337m shares and Biafo Industries, higher 90 paisa at Rs10.05 on 2.780m shares. Large volume reflects that most of them are reducing their losses.
DIVIDEND: Sitara Chemicals cash 47.5 per cent; Al-Abid Silk cash 10 per cent for the year ended June 30, 2003.