KARACHI, Nov 13: Stocks on Wednesday extended the overnight rally as follow-up support persisted significantly on selected counters aided by some positive reports from Islamabad in regard to possible end of the prevailing political standoff. The KSE 100-share index rose by 42 points at 2,265.39. Market capitalization also recovered about Rs9bn at 514bn.

The politically-driven rally was, therefore, intensified followed by reports from Islamabad about the possible coalition government at the centre between PML-Q and the MMA. It reinforced investor perception about the end of the post-election political impasse and hence fresh short-covering at the lower levels.

An optimism about the settlement of the political standoff may well be had from the fact that the KSE 100-share index surged by 41.90 points or 1.8 per cent at 2,265.39, sending signals that it is heading to set new record beyond 2,300-point level if Pakistan Muslim League-Q, the majority party, and the alliance of the religious parties, MMA, forms a coalition government at the centre.

“Such an arrangement will also ensure a smooth working in the two highly sensitive provinces, Frontier and Balochistan, having a common border with Afghanistan”, brokers said adding “the opposition led by ARD parties including PPP and PML-N will also be strong”.

The breakthrough came after the government accepted some of the demand of the MMA relating to Legal Framework Order and constitutional amendments carried through it, analyst said.

However, investors should go defensive scrips or those select performing scrips such as MCB, National Bank, Engro Chemical and ICI Pakistan, until the dust on the political scene settles down and the power transfer is completed, they added.

But some others said it is too early to predict about the formation of the government at the centre and the composition of the coalition partners as much will depend “whether or not forward bloc of the PPP turns into a reality and support the PML-Q.

“The political situation is still fraught with high risks and no one should take a specific lead from the changing political scene”, they said “warning investors to sell at the rise”.

However, as far as background corporate news are concerned most of them are encouraging and IMF’s satisfaction over the performance of the economy could well mean the extension of poverty reduction aid programme.

The market is virtually being guided by the course of events in Islamabad not by its own demands or the investors liking.

Plus signs managed to force a strong lead over the minus ones at 189 to 55, with 36 shares holding on to the last levels.

Prominent gainers were led by Pakistan Refinery, up by Rs5.50 on market talk of bonus shares, Unilever Pakistan, Treet Corporation, Siemens Pakistan, and Pakistan Reinsurance Co, up by Rs6 to 25.70.

They were followed by Sapphire Textiles, Al-Abid Silk, National Refinery, Attock Refinery, Shell Gas, Shell Pakistan, Crescent Steel, BOC Pakistan, Dawood Hercules, Rafhan Bestfoods, Millat Tractors, General Tyre and several others, which posted fresh gains ranging from Rs2 to 5.

Losers were led by Abbott Lab, Morafco Industries, Glaxo-Wellcome Pakistan, Sarhad Cigarettes and Fazal Textiles, off one rupee to Rs5.

Traded volume showed a sizable expansion thanks to active short-covering in the pivotals and rose to 153m shares from the previous 84m shares.

PTCL led the list of actives, up by 35 paisa at Rs21.70 on 22m shares, Sui Northern Gas, higher by 90 paisa at Rs17.50 on 20m shares, Hub-Power, up by 30 paisa at Rs26.65 on 19m shares, National Bank, higher by 80 paisa at Rs26.10 17m shares and MCB, higher by Rs1.25 at Rs34.10 on 12m shares.

Other actives were led by PSO, higher by Rs1.20 on 11m shares, Engro Chemical, up by Rs1.30 on 9m shares, Dewan Salman, firm by 55 paisa on 6m shares, ICI Pakistan, steady by one rupee on 5m shares and Pak PTA, higher by 50 paisa on 4m shares.

FORWARD COUNTER: Engro Chemical, Nishat Mills and MCB came in for active support and posted gains ranging from Rs1.20 to 1.35 amid active trading.