Short-covering was order of KSE session on Wednesday and the index climbed sharply as companies, following the onslaught of the bears had became attractive, and gained substantially under the lead of banks and oil and gas shares.
The benchmark Karachi Stock Exchange''s 100-share index closed at 11,117 level, up 184 points from the previous closing of 10,933. Volume in the ready market were 206 million shares, against 123 million shares recorded on Tuesday. However, the volume in futures market was 105 million shares, against 65 million shares.
Open interests in May and June contracts were recorded at Rs 10.09 billion and Rs 4.99 billion, respectively. Local bourse ended higher after dull activity experienced by the market a day earlier. Oil and gas exploration stocks remained strong throughout the day, said Faiza Naz, research analyst at Jahangir Siddiqui Capital Markets Ltd.
Among these stocks Oil and Gas Development Company and Pakistan Petroleum Limited remained in the limelight and their prices surged by 3.9 percent and 3.4 percent, respectively. Activity in Oil and Gas Development Company was mainly due to a rumour related to discovery in a place called Mela, near Kohat.
However, activity in PPL was on the back of expectations of some positive announcement on privatisation front in the upcoming Board Meeting of Privatisation Commission.
Also, investors'' interest was observed in the stocks of National Bank of Pakistan and Bank of Punjab on the back of expected privatisation of National Investment Trust. Moreover, the day''s rally was broad-based as out of 316 stocks traded, 194 stocks closed on positive note and 82 closed below their previous trading session levels.
Hasnain Asghar from Aziz Fidahusein said that although OGDC and PPL contributed to the gains registered by KSE-100, increase in turnover and stability would continue to invite support in other sectors as well.
Since the market registered an increase of 428 points in previous four sessions, mild adjustment can be awaited for taking fresh positions. Technically, the index would continue to find support around 10970-10977, while mild resistance stays at 11190-11197. Positive expectation from upcoming budget and healthy prospects of main stocks and economic stability assures healthy market.
Jawad Haleem, research analyst at Atlas Capital Markets Ltd, said that OGDC was also the volume leader, contributing to almost a quarter of the total turnover, and added the most to the climb with 99 points. This was due to rumours regarding a new discovery made by the E&P giant. Activity was witnessed in 341 companies, out of which prices of 197 companies rose, those of 100 companies fell and 44 remained unchanged.
Noor Hameed, analyst from Elixir Securities, said that OGDC was the vigour behind the surge. The stock is also up for its GDR issue as it is Pakistan''s largest company with 20 percent weight on the Index. The stock was trading at Rs 170 plus about a month back, and was beaten up till Rs 143 just 3-4 days back. The stock is still in the limelight as the government plans to list GDRs for OGDCL on a foreign exchange (probably London Stock Exchange) for which big names like Goldman Sachs and Citigroup have been appointed lead managers. This gives enough room for market gods to do a lot.
"It was quite a decent close, and possibly the market can still move another 200-300 points, but this doesn''t mean that investors should get carried away. Yes, valuations are there but sitting on cash should be a key to your portfolios, and if you have the courage, please book your profits on strength, as the market does give you room to re-enter at lower levels."