KARACHI, July 8: The KSE 100-share index on Tuesday again breached through the barrier of 3,500 points amid heavy buying triggered by the perception of return of sanity to the tense political situation after the prime minister’s offer of talks to the opposition on the LFO and other issues. The index settled firmly around 3,507, up 37.10 points.

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

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

The index soared by 37.10 points or 1.07 per cent at 3,506.68 as compared to previous 3,469.58, signalling that it can move further higher amid hopes of peace between the opposition and the government after the withdrawal of 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 the overnight sluggishness on any of the counters, reflecting investor perception of peace between the warring parties, which have taken rigid stand on some of the issues.

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

“Positive news followed in quick succession in the backdrop of the president’s statement indicating flexibility on some of the irritants, including the LFO and the prime minister’s talks offer,” analysts said.

Both financial investors and bargain-hunters were not ready to miss the impact of the good news on the share market and hastened to build-up long positions at the current lower levels.

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

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

However, whatever is the outcome of the proposed talks, the news gave the needed push to the market, which was lacking fresh stimulants.

Plus signs dominated the list under the lead of most of the blue chips, some of them touching the limits of their circuit breakers. Advances outpaced losses by a big margins at 227 to 157, with 57 shares holding on to the last levels.

Prominent gainers were led by Central Insurance, Al-Ghazi Tractors, Grays of Cambridge and Siemens Pakistan, up by Rs6.95 to Rs25. They were followed by Island Textiles, Sapphire Textiles and Sapphire Fibre, Dadex Eternit, Atlas Honda, Shell Pakistan, Pakistan Cables, BOC Pakistan, Reckitt and Benckiser, AKD Securities and Fauji Fertilizer, which posted gains ranging from Rs3 to Rs4.10.

Losers were led by Abbott Lab, IGI Insurance, Unilever Pakistan, Fazal Textiles, Jahangir Siddiqui & Co, Mehmood Textiles, EFU General, Dewan Textiles and Javed Omer, off by Rs2.50 to Rs16.

Trading volume shrank to 293m shares as investors held on to their positions anticipating further rise in prices.

PTCL topped the list of most actives, up 60 paisa at Rs29.50 on 33m shares followed by Hub-Power, higher 30 paisa at Rs38.15 on 28m shares, Engro Chemical, up Rs3.25 at Rs88.25 on 27m shares, FFC-Jordan Fertilizer, higher 35 paisa at Rs13.95 on 21m shares and Dewan Salman, firm by 15 paisa at Rs19.15 on 18m shares.

Other actives were followed by ICP SEMF, higher Rs1.85 on 16m shares, PSO, firm by 30 paisa on 14m shares, D.G. Khan Cement, off 45 paisa on 13m shares, Nishat Mills, lower 30 paisa on 12m shares and Sui Northern Gas, higher 95 paisa on 11m shares.

FORWARD COUNTER: Speculative issues on the cleared list also maintained their upward drive under the lead of Fauji Fertilizer and Engro Chemical, up Rs2.15 and Rs3.90 at Rs88.75 and Rs93.15, respectively, on modest turnover followed by reports of higher interim earnings.