After a couple of abortive bids during last week, the KSE 100-share index finally managed to breach through the crucial barrier of 5,300 points and analysts predict it could well prove a turning point for fresh upward drive.

The talk of 6,000 points index level appears to be too ambitious at this stage, while the previous peak level of 5,620 points appears well within reach, if all goes well with the external background news, both on political and sectarian fronts.

The market is currently relying on the strength of higher dividend announcements under a well-thought strategy, and that in turn will keep the market in good shape in the weeks to come.

The Multan incident briefly slowed the market's upward drive as, fearing law and order situation, the investors mostly played safe even at secured places while the weak holders hastened to take profits at the available margins.

The KSE 100-share index finished with an extended gain of 97 points and well above the barrier of 5,300 at 5,343 after two abortive bids to stay above this crucial level. The market capital also stayed above the important level of Rs1,500 at Rs1,514 billion, up Rs19 billion as compared to Rs1,495 billion a week earlier.

On Thursday over three dozen persons were killed by a suicide bomber in a religious congregation in Multan, a mid-country city, which in turn created panic-like conditions here followed by selling by some weak holders and day traders.

Although larger fall was averted, thanks to the presence of strong support at the dips, but uncertainty prevailed as investors were worried over an alarming death toll. The strong weekend rally reflected that investors have vowed to follow the positive market fundamentals rather than negative external factors.

The rally initiated by the central bank ban on loans for speculative trading in real estate remained inconclusive as leading financial institutions awaited the fallout of the Multan incident before making fresh commitments.

Most analysts believe that the market has already digested negative fallout of the killings and may resume its upward drive on the strength of positive fundamentals, including higher corporate announcements and the central bank move to replough massive amounts tied to the property business to stock market, ending the speculation there.

Stocks recovered from the mid-week lows amid heavy short-covering in most of the pivotals aided by perceptions that huge funds would be re-invested in share business after the central bank ban on bank credit for property business.

The central bank action follows reports of massive bank involvement in the property market, ending the prevailing speculation which has pushed the prices of plots, houses and flats to new peak levels.

Bank shares reacted positively to central bank step and rose sharply, although long-term impact on their profit could be negative. The positive reaction to the SBP step was well-reflected in the share market as both financial institutions and punters virtually rushed to grab the floating stock at prevailing prices", analysts said, adding "general perception is that the step could take the market to new highs for near-term."

The central bank on Tuesday directed the banks and DFIs to extend loans only for housing purposes for plots to bonafide construction companies and individuals, ending the prevailing speculative trade in the real estate.

"Owing to liberal bank credit lines, the property prices in the city have risen sharply in recent past having a negative impact on stock trading", brokers said, and hoped that the funds would be reinvested in share business would evoke a lot of interest in low-priced shares."

An idea of prevailing optimism in the market may well be had from the fact that investors ignored some disturbing news from the carryover market where both volume and rates are rising.

Moreover, higher dividend announcements from some leading companies due during the current week could also reinforce the perception that the market was now in a good shape and could seek further levels in coming sessions.

All sectors participated in the run-up the notable feature was that some overvalued shares led the market advance under the lead of the OGDC, the PTCL and some others. But the bulk of support was confined to the energy sector on reports of higher world prices.

Plus signs dominated the list, major gainers being the Al-Ghazi Tractors, Berger Paints, Grays of Cambridge, Shell Gas and the AKD Securities. Other good gainers were led by the PSO, Haroon Oils, Mitchell's Fruits, Treet Corporation and Atlas Battery, which posted good gains amid active trading.

Losers were led by the Murree Brewery, Lakson Tobacco, Pakistan Engineering, Shezan International, Bengal Fibre, the EFU Life Insurance, National Foods and several others.

FORWARD COUNTER: Barring the Pakistan Petroleum and Hub-Power, which remained under pressure and ended lower, other actives including the OGDC, the National Bank, the PSO, the Bank of Punjab, the D.G. Khan Cement and some others managed to finish with extended gains amid higher daily volumes.