KARACHI, Jan 18: Stocks finished the weekend session on a firm note amid predictions that the KSE 100-share index is heading to breach the next psychological barrier of 1,500 points possibly by the next week as the current buying euphoria is expected to be sustained.

“Massive buying at the weekend session owes its strength to strong rumours that diplomatic relations are being restored between Pakistan and India, thanks to Colin Powell’s peace offensive,” says a leading stock analyst.

Already the index has hit the six-month peak level at 1,479 and short of only 20 points, surpassing the July 2001 figure of 1,462 points and as the fears of war are fading out the bull-run is expected to sustained after due technical corrections.

“It could be a first step to defuse the prevailing border tension and Colin Powell may have played a significant role if the rumours are correct,” says a leading stock analyst, commenting on the rumours of restoration of diplomatic relations between Pakistan and India.

The rumours followed some important developments in the Indian embassy in Islamabad, which analysts believe could well prove a prelude to the return of the high commissioner shortly.

The US foreign secretary was here to use his good offices to end the current stand-off between Pakistan and India at the negotiation table rather than on the war front. “Ice is gradually melting down,” they say. The other contributory positive factor was revival of the US aid agency and fresh inflow of aid funds, which analysts said, could lead to economic prosperity.

“Encouraged by successive positive developments both on the political and economic fronts, investors are getting out of their shell and are picking up stocks of their choice almost on all the counters,” brokers said.

The weekend rally signals that fears of war with India are fading out by each day and the current buying euphoria indicates that trading is getting normal.

Plus signs again dominated the list under the lead of EFU Life, Millat Tractors, ICI Pakistan, New Jubilee Insurance, Pakistan Oilfields, ICI Pakistan and Lever Brothers, which posted gains ranging from Rs2 to Rs12.

Javed Omer, PICIC, Adamjee Insurance, Alico, Faisal Spinning, Mehran Sugar, WorldCall, Fauji Fertilizer, and Ghani Glass followed them rising by Rs1.25 to Rs1.50.

Losers were led by 9th ICP, PS, Rupali Polyester, Engro Chemical, Fateh Industries, Murree Brewery, Pakistan Hotles and Knoll Pharma, off one rupee to Rs4.05.

It was in this background that the trading volume soared to 212 million shares as gainers maintained a strong lead over the losers at 145 to 42, out of 220 actives.

Hub-Power again topped the list of most actives, up 65 paisa at Rs21.40 on 78m shares followed by PTCL, higher 60 paisa at Rs16.90 on 64m shares, Sui Northern, firm by 50 paisa at Rs10.90 on 12m shares, Engro Chemical, off Rs1.50 at Rs59.10 on 9m shares and ICI Pakistan, sharply higher after being ex-dividend, up Rs2.90 at Rs42.15 on 7m shares.

Other actives were led by Fauji Fertilizer, up Rs1.25 on 4.998m shares, PSO, off Rs1.30 on 4.010m, Nishat Mills, up 55 paisa on 3.871m, Adamjee Insurance, higher by Rs1.60 on 3.278m and Dewan Salman, up 40 paisa on 3.143m shares.

FUTURE CONTRACTS: A sharp rise of Rs5.51 in the February settlement of PSO highlighted the trading on the forward counters, although its January contract fell by Rs1.40 on active selling and rolling of positions. Engro Chemical also remained under pressure and fell by one rupee at Rs59.50 on 0.268m shares. Fauji Fertilizer’s both contracts rose by Rs1.20 and one rupee ahead of board meeting.