STOCKS remained in strong demand during the preceding week as a judicious combination of positive developments both on the political and economic fronts continued to generate fresh buying almost on all the counters.

Although bulk of the covering purchases and speculative buying originated from the financial traders, mostly on long-term basis, retailers also followed their lead actively giving the needed push to the prevailing price flare-up.

The current peace initiatives by both Pakistan and India to normalize relations between the warring neighbours, however, dominated the trading, although some investors awaited a major breakthrough before riding the bandwagon.

The KSE 100-share index twice over the week fell just seven points short of its cherished goal of 3,000 points as bears thought it was not the right moment to cross the rubicon. It finally ended higher by 47.85 points at 2,972.42 after touching its career-best level of 2,993 twice.

Let the Indians come out with identical peace moves as did Pakistan and that will justify the index onward journey to the coveted level of 3,000 points, which is now not that far off in technical terms.

“The mess of the last five decades may not be cleared just in one go but even a feeble attempt to normalise relations between the two close warring neighbours could give the needed boost to stock trading in both the countries,” analysts predict.

Pakistan has already went out of the way to achieve the goal of peace, Indian response to peace moves appears conditional and is not that open as its ruling political elite has some reservations about its counterpart’s overtures and the ground situation in Kashmir, they added.

“Peace may still remain an elusive goal,” some others say. “The moves appear to be timely and are expected to ease the prevailing tensions in the weeks to come.”

Indications are that the buying euphoria could gather fresh momentum during the coming weeks provided fresh peace overtures continued to pour in from across the border leading to solution of outstanding issues between the two close neighbours, brokers hope.

But those who had in mind the previous record of failed bilateral talks between the two, are a bit skeptical about the positive outcome of the current initiatives and mostly played safe and for good reasons too, they added.

The market’s buoyant outlook was, however, well-reflected in the KSE 100-share index, which is heading to achieve its new chart point of 3,000. It ended with a fresh gain of 48 points or 1.75 per cent at 2,972.42, signalling it could touch the new psychological barrier of 3,000 by the next week.

The market capitalization soared by Rs11 billion to Rs652 billion, close to its all-time peak level of Rs654 billion hit two months back.

The other stimulating factor, which lured investors back in the market was reports that a fresh bidding date for the sell-off of controlling shares of oil giant Pakistan State Oil(PSO), deferred owing to Iraq war to one of the four short-listed higher strategic bidders.

But the immediate morale booster for the leading investors who were in search of fresh stimulants after the drying up of good corporate news on April 30, was the current peace overtures from the Indian prime minister including restoration of full diplomatic relations and opening of the air routes for direct flights.

“The current Indian peace offensive could well prove a double edged weapon,” leading analyst fears. “It may not be a trap to rope in his Pakistani counterpart to stop alleged cross-border terrorism, the quick moves seem to be fraught with high risks.”

Many leading investors including some institutional traders are not included to ride the bandwagon without having some rethinking on the concealed “message behind these snap moves in quick succession.”

No one could deny the benefits of peace and normalization of political relations between the two close nuclear neighbours virtually at war for the last five decades but what will finally count the sincerity of the purpose and a genuine urge for a durable peace.

However, speculative forces are not in a mood to await further developments on the political front and decided to play their own cards apparently in a bid to realise quick gains.

Textiles, chemical, energy shares led the market advance under the lead of cement sector, which came in for strong support on rising prospects of export to Afghanistan, and were leading gainers among the second-liners.

Auto shares on the other remained under pressure and fell.

Plus signs dominated the list as most of the leading shares and blue chips finished with smart gains under the lead of Parke-Davis and Wyeth Pakistan followed by Glaxo-SKF, Shell Pakistan and PSO, which also rose.

Other good gainers were led by Dewan Khalid Textiles, Atlas Battery, Zulfiqar Industries, Gillette Pakistan, Atlas Honda, Unilever Pakistan, Singer Pakistan, Textiles, Dilon, Lawrencepur Woollen, Noon and Shahtaj Sugar, Lakson Tobacco.

Major losers included Siemens Pakistan, BOC Pakistan, Shezan International, Security Papers and Bhanero Textiles, and many others but fell mostly fractionally.

Traded volume touched the high mark of over a billion shares from the previous 600m shares thanks to active short-covering in the volume leaders, notably PTCL, Hub-Power, PSO, Sui Northern Gas, KESC, D.G. Khan DG Khan Cement,Lucky Cement, Bosicor Pakistan, Pakistan PTA, Dewan Motors, Sui Southern Gas, Nishat Mills and some others.

FORWARD COUNTER: Speculative issues on the forward counter also finished on the higher side after mid-week reaction, leading gainers among them PSO followed by Hub-Power, PTCL, Sui Northern Gas and some other.—Muhammad Aslam