KARACHI – The KSE-100 index, after five consecutive bearish sessions, finally shifted gears as it gained 116 points to close at 12,359 points. The anticipated reversal was led by bellwether oil marketing scrips as dread over pricing mechanism faded, in addition to a healthy earnings expectation for the period ending on December 2010.
The KSE-30 index accumulated 189.28 points to close at 12,041.16 points, while the All Share index gained 82.49 points to close at 8,582.83 levels. Leading fertiliser and cement stocks also posted slight recovery, albeit underperforming against the benchmark index. Advances in the banking sector stocks including MCB, UBL and ABL also supplemented the overall northward march of the index. Economic despair and strain on government finances continued to dampen investor sentiments amidst persistent rise in international commodity price.
Rumours of ready board leverage introduction, that firmed up before the market opened, allowed positive opening of the benchmark index. The numbers duly increased on the back of technical recovery, where-in stocks trading with dividends and yielding in double digits invited wide spread buying. High priced stocks, exposed to likely sell-off, barely managed to sustain marginal gains attained during early trade. The turnover was poured in by substantial activity in LOTPTA.
Although badla rumour has been a regular sedative in restricting the market from loosing ground, government’s efforts of reducing expenditure and curtailing inflation, if implemented, might reduce the burden on sensitive indicators.
The impact of leverage and economic progress is likely to stimulate the market, as various valuations will improve after introduction of the much awaited leverage. The rumour of leverage has been over-played, so caution continues to stay the call as it might well be an exit strategy in high priced stocks, said Hasnain Asghar Ali at Aziz Fidahusein.
