KARACHI, Jan 1: Stocks on Tuesday resumed new year trading on bullish note on active short-covering in the pivotals aided by some positive statements by the Indian high-ups on Pakistan’s steps to curb terrorism, allaying fears of an imminent war.

The KSE index recovered 49 points or about four per cent at 1,322.07. The softening of the Indian attitude after Pakistan met its some of the demands has averted, what appears to be an imminent clash, and the consequent return of the bulls, says a floor broker.

“It was not a single factor but a combination of them, which allayed fears of an immediate conflict between the two neighbours,” stock analysts at the W.E. Financials said, adding “the perception that the warring parties may be on the negotiation table possibly at the Saarc meeting defused the prevailing tension leading to the bull-run”.

The market’s buoyant mood was well-reflected in the KSE 100-share index, soared by 49 points or 3.85 percent at 1,322.07, highest level of the day amid an expected trading volume of 114 million shares.

The total market capital rose by Rs9.459bn at Rs305.602bn from the previous Rs296.143bn. The fact that it not only breached through the psychological barrier of 1,300 points but also sustained it and finished close to the day’s peak level that could well be a prelude of a big run-up in the weeks to come.

What seems to have played a decisive role to put the market back on the rails was the perception of softening of the Indian attitude, visit of the British prime minister and the US warning to India “not to push Pakistan too hard.” “Essentially sensitive to war, the market needs peace or even semblance of peace as investors flourish in ideal conditions backed by sound economy,” stock analysts at the AHRA say.

“The market needs peace in the backdrop of steady inflow of foreign aid, rescheduling of massive outstanding loans and the current lower levels could attract any amount of buying in the new year moping operations,” they add. Energy shares led the market advance on active support followed by revision of selling rates of petroleum products and rose by Rs3.20 to Rs4.50 for PSO and Shell Pakistan.

Other good gainers were led by Fertilizer shares, notably Fauji, Engro and Dawood Hercules, up by Rs1.15 to Rs4. Adamjee Insurance, BOC Pakistan, MCB and some leading textile shares, which recovered by Rs1.50 to Rs2.75. Losers were led by Alico, EFU General, Kohat Cement, Atlas Battery, Ferozsons Lab and Lever Brothers, off one rupee to Rs10. All the pivotals as well as second-liners participated in the run-up as was reflected 116 gains and only 37 losers, out of 167 actives in a large volume of 114m shares. Hub-Power was on top of the actives, sharply higher by Rs1.20 at Rs16.70 on 52m shares on rumours of an imminent interim divided followed by PTCL, up 95 paisa at Rs14.55 on 34m shares, PSO, higher by Rs3.20 at Rs95.60 on 7m shares, ICI Pakistan, up Rs2.60 at Rs37.90 on 3m shares and Sui Northern, firm by 60 paisa at Rs9.10 on 3m shares.

FUTURE CONTRACTS: Forward counter also followed the lead of the ready section where Fauji Fertilizer, Engro Chemical an PSO posted gains ranging from Rs1.28 to Rs3.15. Bulk of the business was confined to PTCL, up 85 paisa at Rs14.65 on 4.630m shares followed by Hub-Power, higher by Rs1.14 at Rs16.85 on 3.316m shares. All others also rose modestly.