Early run-up backed by aggressive accumulation in Fauji group stocks of fertilizer sector faced corporate off-loading, however optimism regarding decline in discount rates in the upcoming review expected during the last week of running month (despite ground realities and economic numbers suggesting otherwise) forced the sellers to take a step back. This allowed the resident participants to generate various trading opportunities, while midday stagnation and presence of sellers on strength mainly in the expensive stocks disallowed them to join the euphoria.
The KSE 100 index closed at 11302.22 levels with the gain of 5.20 points, while KSE 30 index secured 24.78 points to close at 10876.06 levels. All Share index closed at 7854.22 levels after gaining 5.43 points. Total 141 scrips advanced 112 declined and 83 remain unchanged out of total 336 scrips traded.
The stance adopted by circulating waves of optimism regarding discount rate did keep the likely panic away from setting in that was expected as a reaction of accusations and threats by US authorities on direct action against terrorist networks. This caution was invigorated by the likelihood of downgrading by international rating agencies, concerns expressed by ADB regarding alarming domestic debt and its impact on the fragile economy and its risk on interest rates, and fast losing value of local currency.
With the economic woes and financial issues hindering the economic growth and impacting the revenue flows of listed companies, persisting, sentiment building efforts are unlikely to tempt the side liners, said Hasnain Asghar Ali at Aziz Fidahusein. However materialization of optimistic expectations regarding triple digit reduction in local discount rates may invite liquidity for placement in dividend yielding stocks, while settled law and order situation will make the investment environment conducive, he added.
Decision of suo moto action may however carry political repercussions, caution was therefore quite evident, as depicted by absence of follow-up to the exciting early trade, which disallowed the benchmark and turnover to match the sensation during early hours.
