Equities on Tuesday recovered on the back of support from financial institutions and leading brokerage houses, though placing bids in fewer stocks yet helping the index to close on a positive note.
The KSE-100 index initially fell 174 points to 10774 with pressure across the board. Thereby lower levels saw participants seeking PTCL, OGDC, POL, PPL, MCB, DGKC, LUCK, PSO, NML, Engro and NBP, due to which the market was able to recover quite handsomely to gain 225 points to 10959, from where the bourse skewed south by 122 points to touch 10836.
The benchmark-100, after touching bottom levels, through selective accumulation in DGKC, OGDC, NBP, MCB, and PSO, saw a superb pullback, trickling the euphoria onto other stocks that not only aided the bourse to cross the psychological barrier of 11000 but also parked MCB and LUCK on their upper locks of Rs 251.75 and Rs 114.45, respectively, closing the day 138 points in gains at 11085.
Abbas Raza, research analyst at First Capital Equities said that the day was full of apprehension and anxiety as most of the contestants were on margin limits or close to expire, with benchmark-100 succumbing on commencement and later, unable to hold on to upper levels, saw many selling their positions at a time when build-up was taking place at lower levels, thus missing out the recovery that pulled the market up.
Bourse's closure above the 11000 mark may see further itself up under the umbrella of fundamentally strong stocks accompanied by volatility. Therefore, tread with caution along with stop loss and profit margin in mind.
Hasnain Asghar from Aziz Fidahusein said that Tuesday's rally was nothing but a technical bounce-back. Fresh buying by local punters and institutions tempted the sideline punters, whereupon covering in last hour allowed the index to register a healthy closing. It is therefore recommended to opt for trading in the stocks with healthy fundamentals while stocks offering values and having charm of onetime benefit or the thrill of privatisation can be held for a longer term.
Technically, the index would continue to invite support around 10910-10917 while overhead resistance stays at 11327-11333. Healthy volumes would invite trading interest from local institutions and wealthy individuals as the values of main stocks are trading well below the high levels which were achieved previously.
Saima Naz, research analyst at WE Financial Services, said that accumulation was witnessed during the earlier half, but it was during the end of the second half when the bulls exerted their will and, by the end of the day, it was their will that prevailed.
Cement sector remained active throughout the day as, according to a television channel, it was expected that Bhasha dam would be inaugurated on March 8. But it was not only cement scrips which recovered but also other leading scrips such as MCB, NBP, OGDC and POL which helped in the market recovery.
"The worst may still not be over, but it seems that dam inauguration and PTCL hand-over might help to recede the bearish sentiment.