All previous records — both in terms of market capitalization and index level — were broken for the second week in a row as investors were not inclined to miss the rising market and an attractive bait of capital gains, despite it being in a highly overbought position.

An idea of renewed buying euphoria may well be had from the fact that at the weekend, the single-session trading volume soared to its second career-best level at 641 million shares — the previous all-time high of 689.315 million attained on December 31, 2002 followed by strong year-end covering purchases in most of the pivotals.

The KSE 100-share index finished at its career-best level of 3,646 during the preceding week and kept the analysts guessing what could be its next chart-point even on short-term basis. Both index and market capitalization finished at their new best levels of 3,646 and Rs811 billion, up 168.03 points or six per cent and Rs36 billion, respectively.

“All roads may not be leading to the KSE’s Khalian Road (Pakistan Wall Street”, one broker says, “the developing buying euphoria indicates these might, during the next couple of weeks”.

Rising daily volumes tell some of the foreign investors have decided to ride the bandwagon as a return of 15 to 20 per cent on investment anywhere is unthinkable but the local market promises this to any prospective investor, he says.

The index level of 4,000 now do not appear a distant possibility as it had already breached through five barriers, starting from 3,000 during the last about two months without any tangible technical correction despite higher carryover volume and rates.

“When too many a rupee chase too few stocks, there is always a price flare-up”, analysts say adding, “terribly liquid money market, 15 to 20 per cent return in share business and shrinking investment avenues have made stock market an envy of the prospective investors including some foreign ones”.

The 4,000-point index level now appears not that ambitious and within the reach if its previous records during the last two months are taken into account, they said adding, “much, however, will depend on the LFO talks and its outcome.

Prime minister’s offer of talks to the opposition on the floor of Parliament on some contentious issues, including the LFO has cooled down the tense political atmosphere at least for near-term.

What seems to have further encouraged investors was quick response from opposition members who withdrew the no-trust move against the Deputy Speaker to give another chance to peace overture. Unchanged monetary policy for next six months was another supporting factor.

“Peace may still be an elusive goal between the warring politicians, prime minister’s offer has certainly eased the tense situation between the MPs, on both sides of the divide”, analysts said.

It soared by points at 3,506.68 as compared to previous 3,469.58, signalling it can move further amid hopes of peace between the opposition and the government after the withdrawal of the no-trust move against the Deputy Speaker by the opposition in response to the Prime Minister’s talks offer on contentious issues including the LFO.

The rally was terribly broad-based from the opening bell as there was no trace of early sluggishness on any of the counters, reflecting investor perception of peace between the warring parties which have taken a rigid stand on some of the issues.

The central bank announcement that there would be no change in the prevailing monetary policy for next six months could well mean that investors could plan their investment priorities on long-term basis.

“Positive news followed in quick succession in the backdrop of President’s statement indicating flexibility on some of the irritants including the LFO and Prime Minister’s talk offer”, analysts said.

Both, the financial investors and the bargain-hunters hate to miss the impact of good news on share market and hastened to build long positions at the current lower levels.

The PSO, the Hub-Power, the Engro Chemical, the PTCL, Fauji Fertiliser, the Sui Northern Gas, the ICI Pakistan and several others came in for strong buying and initiated covering purchases on secondliners.

Opinions are divided over the positive outcome of the government-opposition proposed talks as any change in their rigid positions on the LFO or on President’s uniform could dismantle the entire political edifice.

Whatever the outcome of the talks, the news gave the needed push to the market which was lacking fresh stimulants.

Plus signs dominated the list under the lead of blue chips, some of them touching the limits of their circuit breakers amid massive volume in some of the market leaders including the PTCL, the Hub-Power and some others.

Prominent gainers were led by the Central Insurance, Al-Ghazi Tractors, Grays of Cambridge, and the Siemens Pakistan, up by Rs6.95 to 25. They were followed by the Island Textiles, Sapphire Textiles and Sapphire Fibre, Dadex Eternit, Atlas Honda, Shell Pakistan, Pakistan Cables, the BOC Pakistan, Reckitt and Benckiser, the AKD Securities, Fauji Fertiliser, Wyeth Pakistan, Unilever Pakistan and many others, some of which attained their career-best levels.

Losers were led by the Abbott Lab,the IGI Insurance, Javed Omer, Mehmood Textiles, Fazal Textiles, Jahangir Siddiqui & Co, the EFU Life, the EFU General, Dewan Textiles, Glaxo-SKF and some others but only extreme gains were pared.

Trading volume rose to 2.184 billion shares from the previous 1.761 billion, thanks to massive activities in the PTCL and the Hub-Power, which together accounted for about 70 per cent of the total.

Other actives were led by the PIAC, the PSO, Dewan Salman, Nishat Mills, the D.G.Khan Cement, Maple Leaf Cement, the FFC-Jordan Fertiliser, Lucky Cement, Engro Chemical, Pakistan Oilfields, Telecard, Bosicor Pakistan, the ICP SEMF and several others.

FORWARD COUNTER: Speculative issues on the forward counter also followed the lead of their counterparts in ready section and generally ended higher under the lead of the Hub-Power, the PSO, Pakistan Oilfields, Engro Chemical. The PTCL, Dewan Salman and Nishat Mills also rose amid active trading.—Muhammad Aslam