KARACHI, Nov 25: Despite late selling in some of the pivotals, stocks managed to finish the pre-Eid holiday session on a firm note, signalling the current recovery drive will be resumed after the holidays.

Investors remained in an upbeat mood hoping some positive results of the prime minister’s diplomatic offensive, notably the unilateral ceasefire on the LOC including Siachen and initial Indian welcome of the peace moves.

The market ended maintaining the overnight bullishness but profit-selling prompted by a long weekend ahead owing to Eid holidays allowed it to finish with clipped gains.

After early surging to the day’s peak level of 4,087, the KSE 100-share index finally finished with a fractional rise of 0.87 points at 4,068.29 as compared to 4,067.42 a day earlier owing to late selling in some of leading base shares.

But the underlying sentiment reflects that the market will resume its upward drive after the Eid holidays as investors will resume their covering operations at the still attractively lower levels despite higher carryover business.

Although detailed official Indian response to Pakistan’s peace overtures is still to come, initial thinking on the confidence-building steps announced by the prime minister are expected to break the ice, leading to normalization of relations between the two countries, analysts said.

However, a section of leading investors is a bit skeptical about a major breakthrough on Indo-Pak relations as India’s main concern is about the infiltration of Mujahideen from across the Line of Control, which Pakistan denies.

They said unilateral withdrawal of Pakistan troops from the LOC including Siachen will demonstrate that Pakistan is not aiding the infiltration as widely speculated.

“The long-term impact of new peace moves on the share business will be visible during the post-Eid holiday sessions as by that time official Indian response to Pakistan offer will be known,” they said.

But one thing is clear that any further positive developments on the current peace moves will give a tremendous boost to stock trading in both the countries, floor brokers said.

They said the market should maintain its recovery tempo during the post-eid holiday sessions also as all the basic fundamentals including stable and lower interest rates, positive economic indicators and higher corporate earnings points to a robust rally.

“Based on 2003 working results of major sectors, the market is currently trading at a P/E of 10.7 per cent and dividend yield of 7 per cent, quite attractive as compared to other modes of investment,” says a leading stock analyst.

He attributed lower daily volumes to liquidity crunch as huge amount of about Rs30 billion are still tied to the recently floated IPO of OGDC, which is now trading around Rs43 against its benchmark price of Rs32.

Meanwhile, according to official sources, National Stock Exchange is expected to start operations by next June, which will give the needed depth and transparency to the stock trading.

Plus signs dominated the list, major gainers being Millat Tractors, Star Textiles, Artistic Denim, Atlas Battery, Clover Pakistan, Unilever Pakistan and Javed Omer, up by Rs4 to Rs15.15. Cherat Papers, 9th ICP, Dawood Hercules, Gatron and Island Textiles also rose by Rs2.10 to Rs3.

Losers were led by the energy sector, notably Pakistan Refinery, Shell Pakistan, Pakistan Oilfields and PSO, off Rs2 to Rs6 followed by JWD Sugar, Lawrencepur Woollen, Lakson Tobacco, Clariant Pakistan, BOC Pakistan and Ferozsons Lab also fell by Rs2.50 to Rs5.90 but the largest decline of Rs19.50 was recorded in Siemens Pakistan owing to post-dividend selling.

Trading volume fell to 168m shares from the previous 198m shares but gainers maintained a strong lead over the losers at 138 to 105, with 33 shares holding on to the last levels.

FF Bin Qasim again led the list of actives on merger talk with Fauji Fertilizer, up 70 paisa at Rs20.20 on 58m shares followed by PSO, off Rs6.10 at Rs273.30 on 14m shares, PIAC, firm by 35 paisa at Rs17.95 on 11m shares, Hub-Power, steady five paisa at Rs36.70 on 10m shares and Pakistan Oilfields, off Rs3.15 at Rs196.80 on 9m shares.

Other actives were led by DG Khan Cement, lower 55 paisa on 8m shares, PTCL, up 10 paisa also on 8m shares, Maple Leaf Cement, easy 40 paisa on 5m shares, KESC, up 20 paisa also on 5m shares and Dewan Salman, lower five paisa on 4m shares.

FORWARD COUNTER: OGDC remained in strong demand and rose by another 80 paisa to close at Rs44.40 after hitting the day’s best bid of Rs46.85 on a massive volume of 73m shares.