KARACHI, Dec 22: The LFO-driven rally was further intensified on the stock market on week’s opening session as investors again indulged in speculative buying followed by predictions of a sustained run-up. The KSE index recovered another 56 point at 4,367.12, adding Rs14bn to the market capital at about Rs930bn.

Reports of an agreement on the LFO between the MMA and the government on all the contentious issues kept investors in an upbeat mood throughout the session amid hopes of smooth sailing on the political front after the constitutional package was passed by the parliament possibly by the end of the current week.

All the sectors participated in the run-up, textile, energy and fertilizer sector, notably after the announcement of third interim dividend by Fauji Fertilizer at 32.5 per cent. It has already paid second interim at the rate of 52.5 per cent, the total comes to 85 per cent.

Peace moves with India and positive gestures from there have also reinforced the investor perceptions about the extension of the current rally.

The KSE 100-share index finished with a fresh sharp gain of 56.15 points close to the day’s high of 4,371 at 4,367.12 as compared to 4,310.97 at the weekend session, reflecting the strength of all the base shares. “Investors are, however, a bit worried over the new exposure limits in the carryover trade and once the issue was resolved, together with the deal on the LFO issue, the market is expected to emit bullish sparks in the sessions to come,” analysts predict.

The KSE board was in meeting since afternoon to have the views of the brokerage houses on the exposure limits and decision on their demand was due later in the evening.

If the board accepts the demands of the brokerage houses relating to the problems of new badla rules and their negative impact on the daily trading because of requirements of higher cash amounts, the index level of 5,000 point appears to be well within reach, brokers said.

But if the KSE board sticks to the new rules, the market may suffer stray erosions tomorrow, they said adding, there is no chances of any major dents in the prevailing price structure.

They said despite some positive news from the corporate and economic sectors, the LFO issue has been taking its toll for the last several months and after the deal on it the sailing on the political front are expected to be pretty smooth.

Leading investors and institutional traders have already started to take long positions on the counters where the chances of capital gains are sure on the perception that the passage of constitutional package in the parliament on Dec 26, could trigger strong speculative buying on all the counters.

The other positive development is peace overtures with India and hopes of some positive results after the Saarc meeting in Islamabad. Plus signs dominated the list under the lead of Wyeth Pakistan and Unilever Pakistan, up Rs55 and Rs30 followed by Javed Omer, NDLC-IFIC Bank, Burewala Textiles, Pakistan Refinery, Shell Pakistan, Pakistan Oilfields, Al-Ghazi Tractors, Millat Tractors, Glaxo-SKF and Dawood Hercules, which posted gains ranging from Rs5 to Rs8.55.

Losers were led by Atlas Honda, Sitara Chemical, Noon Sugar, Fazal Textiles BOC Pakistan and Parke-Davis, off Rs3.25 to Rs25, while all other fall were fractional.

Trading volume was maintained at the previous level of 326m shares as gainers maintained a strong lead over the losers at 220 to 98, with 50 holding on to the last levels.

The most of active list was topped by DG Khan Cement, higher by Rs1.15 at Rs46.15 on 48m shares, National Bank, up 50 paisa at Rs53.70 on 30m shares, FF Bin Qasim, firm 35 paisa at Rs17.05 on 28m shares, Pakistan Oilfields, sharply higher by Rs7.50 at Rs231.40 on 26m shares and Maple Leaf Cement, off 85 paisa at Rs32.45 on 24m shares.

Other actives were led by PTCL, firm by 15 paisa on 19m shares, Hub-Power, easy by five paisa also on 19m shares, Fauji Cement, lower five paisa on 19m shares, Lucky Cement, up 20 paisa on 17m shares and PIAC, steady 10 paisa on 14m shares.

FORWARD COUNTER: OGDC came in for active support and rose by five paisa at Rs53.25 on 33m shares followed by FF Bin Qasim, off 68 paisa at Rs17.12 on 4m shares, PSO, up Rs1.50 at Rs281 on 3m shares, PTCL, higher by 50 paisa at Rs35.95 on 2m shares and Hub-Power, up 55 paisa at Rs40.05 also on 2m share.