KARACHI, May 29: The Karachi Stock Exchange (KSE) 100-share index recouped a good part of initial losses on Thursday as some of the leading financial institutions moved in and launched a rescue operation, unlocking many lower locks on the blue chips counters witnessed during the last couple of sessions, but the future outlook still appears not that promising.

It finished with a clipped loss of only 19.93 points at 12,235.05 after having fallen by a massive 556 points earlier, being the session’s low of 11,698.98 on active short-covering on the oil and fertiliser counters and some leading index-based shares.

“But the improvement was not based on positive news and appears to be inspired one as there is no change in the political scenario or a terrible lull,” a leading analyst Faisal A Rajabali said, adding “the market needs sanity on the political front and allaying of fears about rumours of new taxes in the budget”.

Market sources said a KSE delegation met PPP Co-chairman Asif Ali Zardari and Finance Minister Naveed Qamar and apprised them about the problems of investors in relation to the current market decline, but they said there was no positive response with regard to immediate corrective steps, but promised after the budget.

But some others attributed the mid-session improvement and revival of demand to some positive outcome of Islamabad KSE team parleys.

After having breached through another barrier, 12,000, third in a row at 11,698.98 as investors continued to unload their long positions in the backdrop of disturbing rumours, including resignation of the president following in quick succession, the index recouped bulk of the initial losses.

But its junior partners fell further by 75.19 points at 14,319.92 points.

“The market is still in the tight grip of speculative forces which are out to undo just within no time what the capital market had attained during the last couple of years,” analyst Ahsan Mehanti said.

“It may not have political under-currents though some think it may have.”

What seems to have aggravated the situation is the official apathy as there is no word from them, allaying investors’ fears about the capital gains tax and rumours of imposition of other taxes in the budget,” he said.

“The loss of $22 billion in the market capital during the last couple of weeks is a terribly massive figure, half of which is billed to the credit of the government and the other half is shared by investors and brokerage houses,” analyst Ashraf Zakria said, but he thinks the “market has the capacity and the will to recoup in normal trading conditions, backed by official corrective steps.”

“The current sell-off has surpassed all previous market crashes, including those of March 2005 and June 2007 in terms of erosion of the market capital,” analysts Faisal A Rajabali said, adding “it has lost about $22 billion from the market capital since early May, the losses in previous market plunges being $15 and $13 billion, respectively.”

PSO and Colgate Pakistan led the list of leading gainers, up by Rs19.25 and 23.25, respectively. Other prominent gainers were led by Central Insurance, JS & Co, Sitara Chemicals, Ghani Glass, Atlas Honda, Engro Chemical and Pakistan Engineering, up by Rs5 to 18.25.

AKD Capital and EFU Life fell by Rs50.68 and 19.06 on renewed selling followed by Arif Habib Ltd, MCB Bank, EFU General, EFU Life, IGI Insurance, Sapphire Fibres, Indus Motors, Packages and Treet Corporation, off by Rs10.92 to 19.06.

Turnover figure was modest at 192m shares but losers maintained a strong lead over the gainers at 205 to 105, with 24 shares holding on to the last levels.OGDC led the list of actives, up by Rs2.73 at Rs126 on 18m shares followed by NIB Bank, steady by 10 paisa at Rs12.10 on 17m shares, PTCL, higher by Rs1.95 at Rs41.07 on 7m shares, Bank Alfalah, off Rs2.13 at Rs43 also on 7m shares, Pakistan Petroleum, up Rs2.19 at Rs249 on 6m shares, National Bank, off Rs8.06 on 6m shares, Pakistan Oilfields, higher by Rs2.08 at Rs378 on 5m shares and Arif Habib Securities, lower by Rs3.48 at Rs152.80 on 6m shares.

Other actives were led by TRG Pakistan, steady by 16 paisa at Rs6.81 on 10m shares, followed by Fauji Fertiliser Bin Qasim, up Rs1.62 at Rs34.05 on 7m shares.

FORWARD COUNTER: The OGDC also led the list of actives on this counter as its both settlements rose by Rs2.14 and 1.88 at Rs126.45 and 126, respectively, followed by Fauji Fertiliser, higher by Rs1.32 for the May contract and Rs1.65 for the June at Rs34 and 34.67, respectively.

Pakistan Petroleum rose by Rs1.45 at Rs253.20 on 2m shares. Others showed mixed trend amid slow activity.

DEFAULTER COs: Zeal Pak Cement came in for active support and led the list of actives, up six paisa at Rs2.77 on 3.083m shares followed by Norrie Textiles, also up by the same amount at Rs2.08 on 2.890m shares, and Japan Power, lower 21 paisa at Rs5.89 on 0.807m shares.

Unity Modaraba was traded lower by 10 paisa at Rs1.10 on 0.490m shares and Crescent Standard Modaraba, lower 16 paisa at Rs2.44 on 0.106m shares.