KARACHI – Short covering, triggered by fresh inflows mainly from government treasuries, did allow the benchmark attain healthy closing despite maximum decline in the values of OGDC. The KSE-100 index closed at 11289.22 levels marked by a gain of 65.70 points, while total volume and total value stood at 68,716,780 and 3,271,332,188 respectively. The KSE-30 index gained 183.85 points to close at 10940.68 levels, while the all Share index closed at 7907.00 levels following an accumulation of 53.07 points.
However, low volumes depicted lack of wider follow-up due to a gloomy situation on various fronts. Well poised for technical bounce back, the local bourse gave a positive posture during initial trades, wherein main board stocks, having a healthy dividend history, along with growth potential did invite renewed accumulation by resident participants.
The unofficial announcement of an early launch of MTS was then duly circulated in order to affirm strength. Absence of follow-up support as depicted by low turnover and sell-off in high priced stocks, mainly OGDC, by exit seeking aliens and locals executing from beyond boundaries, however made life miserable for resident participants.
Corporate accumulation in various main board stocks, mainly from the government treasuries, did support sentiment building exercise, while cued-up sellers on strength kept majority accumulators mainly on back-foot, except for change of hands on strength in selective stocks during closing hour. Alarming issues on sensitive fronts disallowed follow-up support, while red numbers kept the panic sellers active in high priced stocks.
However, corporate accumulation did allow hand-full stocks from main board to sustain gains attained during early trade. Tough decisions including increase in rates of petroleum products without compromising on high taxes being charged on sale of petroleum products and covering the revenue short fall by decreasing high and non-productive expenses, might trigger social and political un-rest.
It will reduce the purchasing power of locals, already facing tough time in making the ends meet, and the impact on inflation of the likely increase and its influence on monetary policy stance might however create all sorts of chaos for the manufacturing concerns already facing wrath of growing input cost and declining local and export demand along with the corporations trading with high debt, said Hasnain Asghar Ali at Aziz Fidahusein.
