KARACHI - Karachi Stock Exchange on Thursday witnessed an increase of 68 points in its 100 index amid upheaval in the market and support from the financial institutions. KSE-100 index gained 1.23 percent on Thursday after losing 294 points on Wednesday due to disqualification. Benchmark KSE-100 index gained 68.71 points to close at 5,649.49 with trading of worth 161.5 million shares. The E&P giant, OGDC was the volume leader of the day with 21.231 million shares. PTCL, Hubco, National Bank and Bank Al-Falah were also among the most traded shares. Out of total 255 active stocks, 145 closed on positive note and 105 closed negatively while the values of 5 stocks remain unchanged. Experts said that the reports of expected cut in the policy discount rate by 200 basis points and fall in 12-month cut-off yield in the T-Bills auctions supported the market. This development had proved as a sign of improvement for the market at least in the short-run. This anticipation being indicated by the market experts and bankers triggered the sentiments of the local investors, leading them to invest in the major shares of energy, telecom and banking sectors. However, the local bourse is anticipated to witness a bearish sessions during the upcoming days because of political tug-of-war that got new momentum after the disqualification of PML-N leaders. "Negative momentum continued on opening, the support of state fund in the selected stocks invited day traders and the index displayed a recovery of 287 points (from the day's low), tendency of the market participants to book short term gains was however quite visible, as before the buying spree ended the day traders booked gains," stated a market expert. Besides, the re-initiation of yet another political soap and nervousness linked to law and order situation amid the march call in March, the news from the economic front has created doubts in the minds of the local investors. The fact that IMF has agreed to GDP growth rate cut to 2.5 percent reflects low chances of any aggressive economic recovery and of aggressive plans, despite availability of resources. Affirmative by the donor fund on reduction in interest rates, subject to decline in local inflation and the release of second tranche by end March, positive signals from US on release of billions of dollars will certainly keep the likely entrants in the local economy on heels. It is worth-mentioning here that the IMF has expressed its pleasure at measures taken by the government to comply with its targets and the next tranche of US$ 800 million is expected at the end of March 2009. Consequently, a discount rate cut of 100-150 bps in April 2009 is starting to look increasingly probable as well as the possibility of readmission in to the MSCI indices in May 2009. According to BMA research, some pressure is likely on index levels in the coming days, though swift resolution to this situation will be imperative in keeping equity market performance steady in the mid-term. On the other hand, earnings results are in full swing and earnings growth has been healthy thus far with major companies posting earnings growth of 5.4 percent on average YoY.