The mid-week sell-off halted the market’s sustained upward drive during the last week and a larger decline was resisted — thanks to the presence of strong support at the dips. The leading shares, therefore, finished with clipped gains, although the undertone remained a bit shaky.

The tussle on the LFO and the uproar in the National Assembly did not affect the stock trading as investors seemed to have decided to live with it. But what worried them were some disturbing reports from the carryover market in the backdrop of higher badla rate of 18 per cent and bad memories associated with it including the possible default after crossing the exposure limits.

But no such thing happened as the settlement of badla business was smooth on the forward counter despite higher volume of around 500 million shares.

After having established all-time highs both in terms of the index and the market capitalization, the market came in for technical correction and could not maintain their peak levels but the on-balance trend remained on the higher side despite massive mid-week selling in the pivotals.

Though the KSE 100-share index peaked at its career-best level of 4,564 points and the total market capitalization nearly touched the one-trillion-rupee-mark, but the best was yet to come predict the analysts.

It finally closed the week at 4,463.05, up 1.58 points and so did the total market capitalization at Rs989.500 billion owing to mid-week selling in most of the heavily-capitalized shares, notably the PTCL, the PSO and the Hub-Power.

A final cash dividend at the rate of 21 per cent by the Hub-Power was slightly below the market expectations but it attracted strong support at lower levels, recouping some of the losses suffered during the last two sessions.

The payout for the year ended June 30, 2003, comes to 54 per cent as its board had already paid an interim dividend of 33 per cent earlier this year.

The mid-week sell-off was triggered by the fears associated with the higher carryover rate of about 18 per cent and its likely impact on the stock trading, while the higher yields on the Treasury Bills in the latest auction worried the investors fearing the outflow of massive amounts from the share business to the official instruments.

However, a general perception prevailed that the market was expecting to resume its upturn as was reflected by the ready absorption of all sale offers at the dips almost on all counters. Some of the best corporate announcement, notably from the Hub-Power and the Pakistan Oilfields were still to come and both being market leaders could take the market further higher during the next week.

Owing to persistent rise, the market had been in a highly overbought position, which came in the form of selling at higher levels. As far as the inherent strength of the market was concerned, it was intact.

“I didn’t presume that the market was paving the way for corporate globalization here under the WTO, its meteoric rise could well prove a prelude to some unforeseen financial miracle in the months to come”, they predicted.

However, the KSE and the investors enthusiastically celebrated the occasion sending a wave of optimism beyond the corridors of the capital market among the investing public.

Not many analysts, some weeks back, were inclined to think that the Rubican could be crossed with such an ease and a convincing margin. The net rise over the day was Rs9.152 billion at Rs1,007.734 billion as compared to previous figure of Rs998.582 billion.

“As a pre-condition the leading foreign funds seek a financial depth of $20 billion in the local bourse before their official entry “, said a leading stock analyst, adding “we were moving to that direction and sure to hit the target before the year was out”.

Since February, it had risen by Rs451 billion to Rs1,000 from Rs549 billion and from July one to date by Rs121 billion a remarkable achievement, making many investors multimillionaires in between, they said.

During the same period, the KSE 100-share index rose to 4,564 points from the 2,399.15 points, and had almost doubled during the seven months.

As the buying flurry did not take a breather, the KSE 100-share index also maintained its upward drive and after hitting the day’s best bid at 4,577.29 points ended at 4,563.79, up 40.27 points.

Stock brokers said there was a strong whispering in the rings that despite political risks owing to the LFO row, the index was sure to touch the high mark of 5,000 points before the year was out.

Although carryover charges, which swelled to 17 per cent worried the investors who feared large selling but the current tempo of institutional buying showed that the chances of a big shakeout at this stage were remote, they said.

Investors even the jobbers and the weakholders appeared in a mood to assume the role of bears as most of them were following the lead of big and for good reasons too.

Energy, auto and blue chips shares on other counters came in for heavy selling at higher rates and fell sharply but managed to hold on to a good portion of initial gains.

The big gainers were led by Javed Omer which rose by Rs150 on the reports of bonus shares at the rate of 150 per cent in addition to a cash dividend of 250 per cent already paid and the Wyeth Pakistan with sharp extended gains.

They were followed by the Indus Motors, National Refinery, Pakistan Oilfields, Pakistan Cables, Aventis Pharma, Clover Pakistan, Pak-Suzuki Motors and Pakistan Refinery, which posted fresh smart gains and finished higher despite the mid-week selling. The PSO and the Shell Pakistan managed to finish higher from the early lows.

Losers were led by the Pakistan Resource Co, Atlas Battery, Fazal Textiles, the 6th ICP Mutual fund, Lakson Tobacco, Ahmed Hassan Textiles and HinoPak Motors, Indus Motors, Pak-Suzuki Motors and several others.

FORWARD COUNTER: The PSO came in for active selling at the inflated levels and finished sharply lower and so did the Hub-Power owing to post-final dividend selling. The PTCL also followed them but unlike them suffered modest pruning.