Erratic movement in share prices at the Karachi Stock Exchange on Tuesday scared away seasoned investors as the index moved like pendulum where minus signs dominated the proceedings.
The KSE-100 showed an increase of 10.64 points, or 0.20 percent, to 5426.57 as compared with 5415.92.
The volume rose to 644 million shares from 482 million shares of Monday.
The market during initial hours scored nearly 82 points but suddenly selling pressure erupted on rumour, that Hubco unit is not insured and the company has to bear the expenses, pushed down its share value.
The share price touched its low of Rs 34.15 and closed at Rs 34.25, showing a net loss of Rs 1.65 on a turnover of 50 million shares.
However, buying in OGDC, Lucky Cement, Maple Leaf and other scrips helped the index to finish with a small gain of 10 points.
Aadil Ehtesham of Multiline Securities said that the index during mid-day nose-dived after offloading in the stocks such as Hubco, PSO, Fauji, Engro, Fauji Fertiliser Bin Qasim, ICI and Pakistan Oilfields invited across-the-board adjustment, wiping off early gains. Earnings reports, especially from PSO and Sui Northern Gas, in the meantime, had been quite strong but were overshadowed by market's negative sentiment.
Hasnain Asghar of Aziz Fidahusein said that buying in the main stocks allowed the index a positive opening, and reduction in badla rate invited the big players. The index failed to consolidate above the technical resistance of 5480-5488 as the four-day COT forced the weak holders to offload non-performing high priced stocks.
Therefore, offloading from the COT led to a technical adjustment and the index landed in the negative zone registering a low of 5395.
Committed buying in the main stocks, however, led a consolidated positive closing, thereby indicating a smooth surge. Technically, therefore, the index is likely to find support around 5410-5417 while resistance stays at 5496-5503.
It is therefore recommended to accumulate leading stocks around closing levels, while best level should be looked for aggressive buying in the power giant.
The ongoing selling has pushed the share price at a very attractive level, while technical support and PE should be looked for going long in the growth stocks.
OGDC moved up to Rs 68.80 from Rs 66.90 on a turnover of 148 million shares; Fauji Cement rose 20 paisa to Rs 16 on trading of 62 million shares; PTCL shed 30 paisa to Rs 43 on a volume of 62 million shares; and D.G. Khan Cement closed at Rs 58.25, ie higher by 75 paisa on total deals of 56 million shares.
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