Market watch: KSE rises despite discount rate hike

All major oil, banking and fertiliser stocks jump except OGDC.

KARACHI: The stock market shrugged off a 50-basis-point increase in interest rate and jumped 71 points on Tuesday.

The Karachi Stock Exchange benchmark 100-share index ended 0.64 per cent higher at 11,234.76.

The State Bank on Monday increased in its key policy rate to 14 per cent from 13.5 per cent to combat persistent inflation.

The increase was in line with expectations that encouraged investors to repurchase fundamentally strong shares, said Topline Securities equity dealer Samar Iqbal. The focus of investors was on cash-rich companies due to increase in discount rate, added Iqbal.

Offshore net buying of $1.15 million during the day helped the bulls dominate the market, said Crosby Securities analyst Ovais Iqbal. Moreover, net buying of $39.02 million was witnessed during the current month compared with $31.82 million net buying recorded last month. Oil and gas exploration stocks not only kept the sentiment positive but also revived buying interest of local and offshore investors, said Aziz Fidahusein and Company research head Hasnain Asghar Ali.

All major oil, banking and fertiliser stocks jumped, except for the Oil and Gas Development Company, which edged lower by 0.5 per cent.

Trade volumes increased to 165.17 million shares compared with Monday’s tally of 90.29 million shares. Shares of 389 companies were traded on Tuesday. At the end of the day, 264 stocks closed higher, 104 declined and 21 remained unchanged. The value of shares traded during the day was Rs6.09 billion.

Lotte Pakistan PTA remained the volume leader with a little under 30 million shares changing hands and the price rose Rs0.55 to close at Rs12.36.

It was followed by Jahangir Siddiqui and Company with 13.82 million shares gaining Rs0.28 to close at Rs13.03 and Nishat Mills with 11.67 million shares firming Rs1.88 to close at Rs59.61.

Published in The Express Tribune, December 1^st, 2010.