KARACHI, Sept 1: Stocks on Monday finished higher under the lead of energy sector and blue chips boosted by reports of higher earnings after early selling caused by political risks was fully absorbed at the dips.

The market capitalization swelled to Rs998.582bn (about $17bn), adding Rs13.180bn to the weekend total, up Rs13.180bn and signalled that the coveted level of Rs1,000bn is now well within reach.

After showing terribly violent either-way movement, the KSE 100-share index managed to finish well above the crucial level of 4,500 points as a late burst of speculative buying drove bears out of the market.

Over the day, the index showed wide two-way fluctuations of 90 points as the bulls and the bears fought pitched battles to tilt the price balance in their respective favour but the former managed to steal the show thanks to strong institutional buying in the pivotals, notably PSO and Shell Pakistan after further increase of 3.5 per cent in petroleum rates.

It finally ended at the day’s peak of 4,523.52 points after hitting the lowest for the day at 4.432.22, up 62.05 points or two per cent in a reduced traded volume.

Energy shares led the market advance on heavy late buying in PSO, Shell Pakistan, National Refinery, Pakistan Oilfields on rumours of bonus shares in addition to a good final dividend followed by some second-liners in the cement and other sectors. Pakistan Oilfields whose board meeting is due on Sept 15, was outstanding among them on rumours of bonus shares.

Analysts said the market being now in a highly overbought condition needed technical correction, but bulls were not inclined to loosen their “price squeeze” on selected counters for reasons best known to them and hence the continuation of the bull run.

Its current volatility also reflects political risks as the news from the political front are not that encouraging and could take negative turn any day, although investors are ignoring them, they added.

“Barring Hub-Power, whose board meeting is due by the end of the current month and market talk of final of 25 to 30 per cent in addition to 33 per cent interim already paid, no other significant board meeting is due,” they said and added that could well mean “setting in of a technical reaction any day”.

But others believe it is now pretty difficult to pull the market down from the current levels as investors take money off the table only to reinvest again in the running in liquid stocks.

Although a big chunk of the floating surplus money has found its way into the gold during the last couple of session, the outflow from the share business was insignificant in the analysts’ perceptions.

Gold prices on the local bullion market on Friday soared to Rs7,005 per 10 gram, its second-best career figure during the last six months. The rise is attributed partly to higher world prices and partly to a modest outflow from the capital market.

The other contributory positive factor, which is expected to keep the market in a good shape at least by the end of the current year is a big list of privatization of some mega issues, including PSO, PTCL, Habib Bank and partial further disinvestment (3.5 per cent shares) of the National Bank.

“The massive presence of the institutional traders in the market has in a way restored the confidence of general investor in the share business who is now more interest in paper profit rather than other modes of investment,” says a leading broker.

Prominent gainers were led by Shafiq Textiles, National Refinery, Shell Gas, Indus Motors, Pak-Suzuki Motors, Pakistan Cables after the announcement of cash dividend of 55 per cent plus bonus shares of 25 per cent, Clover Pakistan, Nestle MilkPak, Glaxo-SKF, Shell Gas and Rafhan Maize, which posted sharp gains ranging from Rs7.25 to Rs17. But the largest rise of Rs39.75 and 90.35 were noted in Javed Omer and Wyeth Pakistan against their face value of Rs10.

Losers were led by Atlas Honda, Central Insurance, Lakson Tobacco and Siemens Pakistan, off Rs5 to Rs17.15. Others fell by Rs2 to Rs3.

It was in this background that the advancing shares maintained a strong lead over the losing ones at 211 to 144, with 58 shares holding on to the last levels amid a reduced volume of 462m shares.

PTCL was actively traded, up 55 paisa at Rs39.20 on 51m shares followed by Hub-Power, easy 20 paisa at Rs44.10 on 42m shares, Bosicor Pakistan, higher by Rs2.50 at Rs36.10 on 39m shares, Pakistan Oilfields, sharply higher by Rs25.65 at Rs368.15 on market talk of higher final plus bonus shares and D.G. Khan Cement, up Rs1.25 at Rs43.85 on 29m shares.

Dewan Motors led the list of other actives, higher by 2.20 on 25m shares, PSO, up Rs5.55 on 22m shares, Dewan Salman, higher by Rs1.15 also on 22m shares, Chakwal Cement, firm by 15 paisa on 21m shares and Fauji Cement, lower 25 paisa on 19m shares.

FORWARD COUNTER: Hub-Power came in for active selling, off 25 paisa at Rs44.55 on 13m shares, followed by PSO, sharply higher by Rs4.50 at Rs293 on 8m shares, PTCL, up 25 paisa at Rs39.30 on 7m shares and FFC-Jordan Fertilizer, lower 22 paisa at Rs19.20 on 2m shares and Sui Northern Gas, up 65 paisa at Rs46.90 also on 2m shares. MCB was marked up by Rs1.35 at Rs56.60 on light business.