KARACHI, Sept 8: Stocks on Wednesday gave a better performance as investors covered positions at the lower levels almost on all the counters, pushing prices as well as the KSE 100-share index modestly higher from the current lows.
Essentially, it was a technical rally and could not be relied upon as investor fears about the margin financing continue to take its toll. The fact that the index failed to hold on to its initial gains reinforced the general perception that the market is still not out of the danger points, says a leading stock analyst.
After having fallen sharply lower during the last two sessions, the market seems to have digested the negative fallout of the margin financing as a section of investors led by the institutional traders was back in the arena and made active covering purchases almost on all the counters.
The KSE 100-share index, which has plunged by 150 points or three percent during the last two sessions recovered 30.62 points at 5,199.39 after having breached at one stage the barrier of 5,200 points at 5,233, up 63 points.
The fact that it could not sustain the mid-session run-up reflects that investors are still in two minds about the direction of the market and prefer to play safe at least for the near-term.
"There was no external aiding factor, which reverse the trend barring market's technical demands," analysts said, adding "even the announcement about the replacement of badla mode of investment by margin financing through banks was not a valid reasons for the current sell-off, but bears made it look like that."
Prices of most of the stocks, notably those whose dividend announcements are due have attained attractively lower levels and warranted a lot of covering purchases and that came in the form of short-covering, brokers said.
Although there are immediate bearish reasons on which bears could feed on for another session or two, much will depend on the institutional support. "Whether or not it re-enters the market or will remain conspicuous by its absence as it has been during the last couple of session."
Corporate announcements by over half a dozen companies were on the higher side of the investors' perceptions but they failed to make themselves a positive aiding factor, analysts said.
IGI Insurance and Javed Omer were leading among the gainers, up Rs20.25 and 17.80, respectively, followed by Pakistan Cables, Pak Resource Insurance, Al-Ghazi Tractors, Pak-Suzuki Motors, Millat Tractors, Colgate Pakistan and Arif Habib Securities, up by Rs4.15 to Rs11.
Losers were EFU General Insurance an Lakson Tobacco, which shed another Rs12 in addition to overnight's Rs12 owing to post-dividend selling. The former was down by Rs4.Other notable losers included Din Textiles, Bolan Casting, Dawood Hercules, International Industries, Pakistan Paper Products and Shell LPG, off Rs2 to Rs4.
Trading volume further rose to 200m shares from the previous 155m shares as the advancing shares held a strong lead over the losing ones at 224 to 92,with 40 shares holding on to the last levels.
The most active list was topped by Bank of Punjab, up Rs2.225 at Rs64.80 on 28m shares, followed by D.G. Khan Cement, higher by Rs1.25 at Rs56.95 on 25m shares, National Bank, steady by 60 paisa at Rs70 on 13m shares, OGDCL, up 25 paisa at Rs63.80 also on 12m shares, PTCL, lower 60 paisa at Rs40.35 on 10m shares, Hub-Power, up 40 paisa at Rs31.05 on 10m shares and Askari Bank, higher by Rs1.15 at Rs80.15 also on 10m shares.
Other actives were led by Fauji Fertilizer Bin Qasim, up 15 paisa on 8m shares, Sui Northern Gas, firm 20 paisa also 7m shares and Lucky Cement, up 90 paisa on 6m shares.
FORWARD COUNTER: Pakistan Petroleum came in for strong support at the lower levels in the backdrop of last two days' sale, and recovered to close higher by Rs3.20 at Rs109.35 on 55.165m shares followed by PTCL, off 70 paisa at Rs40.30 on 5m shares, D.G Khan Cement, higher by Rs1.25 at Rs57.05 also on 5m shares, OGDCL, unchanged at Rs63.75 on 3m shares and Hub-Power, up 40 paisa at Rs31.20 also on 3m shares.
DEFAULTER COS: Trading on this counter remained sluggish in the absence of strong demand from any quarter. Prices generally showed either-way movement amid alternate bouts of buying and selling. Cres-Standard Bank again came in for active support and rose by 65 paisa at Rs10.75 on 0.151m shares.
DIVIDEND: Wah Nobel Chemicals, cash 35 per cent; and Nimir Industrial Chemicals, right shares of 25 per cent.