KARACHI, Oct 30: Stocks on Tuesday took a long overdue technical pause, as a section of leading investors indulged in profit-selling at the inflated levels amid an actively traded session. The KSE 100-share index was off 12.96 points at 1,412.35.
But the underlying sentiment at no stage showed signs of weakness thanks to the presence of strong buying at the dips, which demonstrated that the market is expected to resume its upward drive after meeting its technical compulsions.
“Heavy profit-selling in PTCL and Hub-Power, known as trend-setters, allowed the broader market to complete its consolidation requirements apparently to pave the way for a big turnaround even tomorrow,” most stock brokers were of the belief.
There were no reasons to assume that the current bull-run had lost its fury, but rather it could gather strong momentum as the developing financial scenario suggested, they added.
Dividend announcements pouring in for the year ended June 30, 2001 are encouraging and in part are contributing to the market’s upturn. A handsome dividend at the rate of 70 per cent by Ferozsons Lab, for instance, was well above the market expectations as was reflected by a big rise of Rs.7.50 in its share value at Rs.37.50.
The KSE 100-share index closed with a modest decline of 12.96 points at 1,412.25 as compared to 1,425.31 a day earlier, reflecting the weakness of leading base shares.
Trading resumed in the backdrop of lifting of more economic sanctions by the US and promise of new credit lines, but, as the market largely followed its technical demands profit-selling, was evident on all the blue chip counters at the inflated levels.
The market trend remained highly erratic as investors played on both sides of the fence indulging in alternate bouts of buying and selling, but the underlying sentiment at no stage showed signs that the current run-up is overdone.
“The reaction was technical and has nothing to do with the basic bullish fundamentals,” stock analysts at the KASB & CO said “In market parlance it is called consolidation phase, which follows each rise.”
No one could deny the fact that the market is in an overbought position, although in patches, and as each rise is destined to pave the way for a decline on technical grounds so does the trading pattern.
But leading brokerage houses are signalling to their clients to have a stake at least in the pivotals at each dip as the market is in the tight grips of bulls and speculative forces, who could take it to new peaks.
“It is not that bad to buy blue chips such as Hub-Power, PTCL, ICI Pakistan, Fauji Fertilizer, Engro Chemicals and Sui Southern around these levels as they ensure handsome capital gains,” stock analysts at the W.E. Financial Services predict.
Minus dominated the list, although most of the price changes were fractional barring some MNCs including Knoll Pharma, Siemens and Shell Pakistan, which suffered fall ranging from Rs.2 to 5.45.
Among the locals, Orix Leasing, Adamjee Insurance, PSO, Sitara Chemical, Sapphire Textiles and Sapphire Fibre were leading, off one rupee to Rs.2.
Wyeth Pakistan and Nestle Milk Pak were leading among the gainers, up Rs.8 to Rs.10 followed by Dewan Mushtaq Textiles, Nagina Cotton, Al-Jadeed Textiles, Modern Textiles and Al-Abbas Sugar, which rose by one rupee to Rs.1.10.
Traded volume shrank to 241m shares from the previous 268 shares as leading investors held on to their positions, having faith in the market’s capacity to rise further. Losers, however, managed to force a strong lead over the gainers at 118 to 56, out of 216 actives.
Hub-Power and PTCL closely followed each other in terms of the day’s tally, the latter being down 50 paisa at Rs.18.20 on 87m shares, and the former, off 55 paisa at Rs.22.85 on 86.530m shares, Sui Northern, higher 55 paisa at Rs.11.25 on 11m shares, ICI Pakistan, up 70 paisa at Rs.49.10 on 10m shares and MCB, firm by 20 paisa at Rs.25.50 on 8m shares.
Other actives included Engro Chemical, firm by 15 paisa on 7m shares, PSO, off 70 paisa on 6m shares, WorldCall, up 30 paisa on 2.343m shares, Fauji Fertilizer, lower 40 paisa on 2m shares and Dewan Salman, easy 10 paisa on 1.626m shares.
FUTURE CONTRACTS: Forward counter also remained under pressure where leading shares attracted sympathetic selling under the lead of the PTCL and Hub-Power, off Rs.1.05 and 1.20 at Rs. 18.30 and 21.70 on 2.209m and 1.137m shares respectively. PSO also fell by Rs.1.60 at Rs.110.40 on 1.205m shares. Others also fell modestly.
DEFAULTER COMPANIES: Trading on this counter was light as only 2,500 shares changed hands under the lead of Service Fabrics, unchanged at Rs.0.35 on 1,000 shares. Ravi Rayon and Amin Fabrics were quoted higher by five paisa and unchanged at Rs.0.65 and 4.50 on 500 shares each.