KARACHI, Jan 12: Stocks on Monday failed to extend the weekend rally as leading base shares ran into profit-selling at the inflated levels partly owing to liquidity crunch and partly to margin calls on some of the brokerage houses.

After resuming trading 240 points higher at 6,240.23 aided by reports that the SECP had allowed the managements of the listed companies to buy back their shares in an apparent effort to boost activity, but late profit-selling at the higher levels to line up fresh liquidity weighed against the underlying sentiment, analysts said.However, the KSE 100-share index managed to finish well above the resistant level of 6,041.44 points, off 102.37 points after having hit the session’s low at 5,914.68 on late covering purchases.

Although National Bank managed to finish with extended gain limiting the market fall, other leading base shares, notably PSO, OGDC, MCB Bank, Engro Chemical and ICI Pakistan came in for active selling and ended with sharp fall.

Its junior partner, the KSE 30–share index and All Share index also reacted to close down by 39.60 and 77.92 points respectively at 5,739.01 and 4,510.32 points.

“It is pretty difficult to predict about the future direction of the market as negative news far outweigh the positive ones,” a leading stock analyst Ahsan Mehanti said. “But investors have the will and courage to maintain the current recovery trend provided liquidity position shows an improvement”.

Opinions are divided over the fund support. Some say it is too small to keep the market in a good shape, while some others claim it has yet to make a debut.

“Last week’s sustained run-up was not based on speculative thinking about the advent of fund buying,” analyst Ashraf Zakaria observes, adding it has some sound basis about its presence though on some leading bank and oil shares.

Analyst Tabish H. Rajabali thinks the correction was technical and as far as the objective conditions are concerned they point to fresh rise as investors are not inclined to miss an attractive bait of capital gains at the current lower levels. “Late recovery in the index points to resumption of the upward drive when the trading resumes on Tuesday.

The management of the JWD Sugar Mills gave a pleasant surprise to its shareholders after having declared a cash dividend at the rate of 35 per cent plus bonus shares of 15 per cent amid galore of omissions in this sector for the year ended Sept 30, 2008.

Owing to active selling on almost all the counters, losers dominated the list of actives under the lead of EFU Life and Siemens Pakistan, off by Rs16.94 and Rs46.

They were followed by leading shares such as Adamjee Insurance, EFU General, Pakistan Tobacco, PSO, Dawood Hercules, PECO, Al-Ghazi Tractors, Shell Pakistan and Pakistan Services, which suffered fall ranging from Rs4.22 to Rs16.66.

Among the prominent gainers, National Bank, New Jubilee Insurance, National Refinery, Mari Gas, Pakistan Petroleum, Engro Chemical, Attock Petroleum and Millat Tractors were notable, which posted fresh gains ranging from Rs2.90 to Rs8.33.

Trading volume fell further to 123m shares as a formidable section of investors kept to the sidelines from 146m shares at the last weekend as losers forced a strong lead over the gainers at 204 to 52, with eight shares holding onto the last levels.

OGDC again led the list of actives, off Rs1.53 at Rs52.49 on 12m shares followed by WorldCall Telecom, easy by 50 paisa at Rs3.76 on 11m shares, National Bank, higher by Rs2.90 at Rs60.99 on 8m shares, TRG Pakistan, lower 17 paisa at Rs2.51 on 5m shares, Fauji Fertiliser up Rs3.74 at Rs78.66 on 5m shares and NIB Bank, lower 20 paisa at Rs5.724m shares.

Engro Chemical followed them, higher by Rs5.83 on 4m shares, MCB Bank, off Rs1.99 at Rs116.34 also on 4m shares and PTCL, easy by 35 paisa at Rs16.10 on 4m shares.

FORWARD COUNTER: Easier conditions were again witnessed on this counter as leading shares maintained their downward drift in the absence buying support from any quarter.

Leading losers among them were ICI Pakistan, JS & Co and PSO, which suffered fall ranging from Rs2.07 to Rs4.35. Others also fell without any transaction.

DEFAULTER COMPANIES: Zeal Pak Cement led the list of actives, easy by five paisa at Rs0.61 on 3.560m shares followed by Unity Modaraba, lower by 26 paisa at Rs0.26 on 1.413m shares and Japan Power, off 19 paisa at Rs1.80 on 0.451m shares.

Other actives were led by S.S. Oil, off 74 paisa at Rs2.98 on 0.71m shares, while others were traded mostly on the lower side.