KARACHI, April 13: Stocks on Wednesday staged a broad recovery on active covering across the board triggered by attractively lower levels the market touched because of massive fall on Tuesday. The KSE 100-share index recouped a good part of overnight loss, which was well over four per cent, by about three per cent or 184.59 points at 7,123.62 as compared to 6,939.03 a day earlier adding Rs51 billion to the market capital at Rs1,978 billion.
The market seems to have absorbed the likely negative fallout of 1.5 per cent increase in the discount rate at nine per cent from the previous 7.5 per cent after over two years by the central bank on Tuesday as investors flooded the market with fresh buying orders at the lower levels.
“Investors appear to have been encouraged to cover positions at the lower rates as there was no indication of rate hike by any of them to their customers in line with the State Bank move,” one analyst said. ”Banks will think twice to follow the central bank as they have their own clientele limitations,” another said.
All the leading base shares, notably OGDC, Pakistan Oilfields and the PSO participated in the run-up under the lead of PTCL, which was massively traded on market talk of its early sell-off.
However, there is no strong financial fundamental behind the snap rally just in the backdrop of overnight massive falls but technical factors seemed to have worked in support of the market.
“The market needs only fresh investment of Rs10 billion to get back on the rails,” says a leading floor broker adding ”there is a lot of floating money around and someone must rope it in and financial traders help them in their effort to save small investors from fresh losses.”
Plus signs were strewn all over the list, and major gainers were Pakistan Refinery, Attock Refinery, Atlas Honda, PSO, Shell Pakistan, Pakistan Oilfields, Wyeth Pakistan, which posted gains ranging from Rs13 to Rs49.
They were followed by Arif Habib Securities, Javed Omer, International Industries, HinoPak, and Artistic Denim, up by Rs7 to Rs16.
Prominent losers were led by PPL, Noon Sugar, Sapphire Fibre, National Refinery and Mehmood Textiles, off Rs3.55 to Rs5.10.
Trading volume rose to 318m shares from the previous 63m shares as gainers forced a strong lead over the losers at 245 to 87, with 21 shares holding on to the last levels.
The most active list was topped by PTCL, higher by Rs2.05 at Rs60.15 on 116m shares followed by D.G.Khan Cement, up Rs4.45 at Rs64 on 26m shares, PSO, sharply higher by Rs18.45 at Rs393 on 23m shares, Pak PTA, firm by Rs1.35 at Rs12.60 on 20m shares, Pakistan Oilfields, higher by Rs19.70 at Rs282.65 on 18m shares, OGDC, steady by 30 paisa at Rs96 on 8m shares.
Other actives included Fauji Fertilizer Bin Qasim, up Rs2 on 16m shares, Bank of Punjab, higher by Rs4.40 on 13m shares and Fauji Cement, up Rs1.35 on 6m shares.
FOWARD COUNTER: PTCL was also actively traded on this counter, up Rs2.10 at Rs60.90 on 13m shares followed by Kot Addu, up Rs3.65 at Rs52.40 on 8m shares, PSO, sharply higher by Rs1.6.75 at Rs395 also on 8m shares, OGDC, up 20 paisa at Rs96.85 on 7m shares.
Pakistan Petroleum was an exception, which remained under pressure and suffered a fresh fall of Rs3.85 at Rs188.
DEFAULTER COS: The activity on this counter remained slow as leading investors remained busy in the ready section. Prices, however, showed fractional gains amid light trading.