Heavy buying in bank shares highlighted trading on the stock market during last week. Predictions of higher interim dividend did not allow investors to sit on the sidelines.

The National and Punjab banks were among the market leaders followed by the MCB, Askari Bank and some others. Unlike the cement shares, which also assumed the role of trend-setters a couple of weeks earlier, the price flare-up in these was massive.

It was perhaps for the first time in the last couple of years that banks outperformed the legendary blue chip sector and for good reasons too, as their interim earnings are on higher side.

Stocks, therefore, gave another improved performance under the lead of blue chips. But the broader market remained under pressure owing to selling by weakh olders for replacement buying on low-priced counters having potential of capital gains.

The future outlook, however, appears fairly encouraging in the backdrop of positive economic indicators and political changes at the top in next couple of months. Both, the KSE 100-share index and the market capital showed further gains on active short-covering amid predictions of higher corporate earnings.

The index ended at 5,454.18, up 101.21 points and the market capital at Rs1,475.00 billion showing an improvement of Rs35 billion over previous week's figure. Although, the IPO of massively-capitalized Pakistan Petroleum - ruling around Rs100 against its base price of Rs55 - still is away for a week (July 19 to 22), a section of investors is already lining up funds to invest in it after selling some overvalued shares.

Most leading brokers are now eyeing the index level of 6,000 points - the correction and consolidation phases notwithstanding election of finance minister as a the next prime minister could give it a major push.

Together with heavy weights, notably the OGDC, the PTCL and some others, the entry of Pakistan Petroleum in leading base shares could give the needed boost to index, enabling it to rise up to any level. However, it may not follow another price-flare up as most leading shares have already touched their near-saturation points.

Some analysts attributed the market's uneven performance to the absence of leading institutional traders who are said to be busy in finalizing the new account buying portfolios.

A continued fall in the turnover figure reflects that both, the bargain-hunters and speculative forces are in two minds about the future direction of the market, while playing safe.

A loud whispering about margin financing in place of the prevailing badla business may not be one of the negative reasons behind the low volume as did the Capital Value Tax (CVT). But a section of investors could not precisely adjust themselves to changing norms so far leading to uncertainty.

The index is progressively inching up to exploit new highs on the strength of the PTCL and the OGDC and some other pivotals, which together hold a weightage of 40 per cent in it and may surpass its previous all-time peak of 5,620 points established late last year.

Heavy buying in the ICI Pakistan, which soared by Rs6 at Rs94 on reports of higher earning was said to be another supporting factor behind the market's run-up. Its earnings are on the rise. The Bank of Punjab followed it on an identical reports.

The absence of leading institutional traders continues to take its toll in the form of low volume and until they are back in the market, the market's fresh upward momentum may remain inconclusive, analysts said.

Most are still busy in the process of finalizing the new year's portfolio in the backdrop of emerging political realities and may stay away for another couple of sessions, they said.

Despite their long absence the performance of broader market was not that bad as was reflected by an astounding debut made by the provisionally listed Pakistan Petroleum which is still being quoted at around Rs114.

However, leading base shares remained in active demand both from the retailers and bargain-hunters and kept the market in a good shape. Cement sector, which has assumed the role of a trend-setter for the last three months on reports of higher exports and production failed to move further higher as a section of financial traders liquidated long positions in some of those.

But on the hand, energy shares, notably the Shell Pakistan, the National and Pakistan Refinery came in for active support in anticipation of an increase in fortnightly selling prices because of higher world rates.

It generally ended higher. Prominent gainers were led by the Wyeth Pakistan, which has been under pressure for the last two sessions and recovered Rs87.75 followed by Javed Omer and Siemens Pakistan, up Rs45.35 and 20.

Other good gainers included the Pakistan Resource Co, National Refinery, Pak Electron, Shell Pakistan, Jahangir Siddiqui Bank and the Tritex Cotton. Losses on the other hand were modest barring the Arif Habib Securities, the EFU Life, the IGI Insurance, Unilever and Aventis, which suffered decline.

FORWARD COUNTER: The notable feature of the week was that the provisionally listed Pakistan Petroleum made a firm debut and after touching the peak at Rs118.35 reacted to finish at 107.30 amid active two-way trading. However, other leading speculative shares finished higher under the lead of the OGDC, the PTCL, the ICI Pakistan, National Bank, Sui Northern Gas and several others amid active trading.