KARACHI, July 31: The KSE 100-share index on Thursday finished well above the barrier of 3,900 points as bulls were not inclined to take even a technical breather in an overbought market despite the fact that a massive correction is now overdue. It ended higher by 63.42 points at 3,933.37. Market capitalization swelled to 878bn, up Rs13bn.

“How the things will shape in future will be decided after index level of 4,000 is hit,” analysts said. “There could be an overdue correction or the continuation of the current run-up depending on the background news, notably the corporate earnings.”

The investor mood and future market perceptions is well-reflected in its upward bias after they ignored the official directive to banks banning credits against the national saving certificates, indicating that a lot of liquid funds are around to support the share business.

Energy shares again led the market advance in massive buying in all the pivotals, notably PSO, Shell Pakistan amid predictions of increase in petroleum prices for the fortnight ended July 31.

The index finished well above the barrier at 3,933.37 points reflects that a prominent section of bulls is inclined to reach the hereto elusive goal possibly by tomorrow. The rise over the day of 63.42 points is massive in a highly overbought market.

It has gained over 100 points or 4 per cent during the week in an apparent bull effort to reach the goal within the shortest possible time but what after that is anybody’s guess. The 4,000 index level is now only 67 points away.

Apart from reports of government-MMA deal on the political issues to end the 9-month standoff, the current run-up also derived its strength from the higher corporate dividend.

Massive buying in PSO in anticipation of final bidding date for its sell-off featured the trading as its share value soared by Rs19.60 at Rs280.90. Reports that its annual meeting will be held on Aug 12, also triggered buystops in it on expectations of higher dividend.

Engro Chemical declared an interim cash dividend at the rate of 25 per cent or Rs2.5 per share of Rs10 on a half year profit of Rs534m. But Fauji Fertilizer’s earnings were a bit lower at Rs1.179bn for the half year, although it announced second interim dividend at the rate of 25 per cent or Rs2.25 per share making the total together with the first interim for the year to Rs5.25. But both the payouts have positive impact on the market as investor hoped higher dividend from the upcoming board meetings.

“The market will need an enormous fresh liquidity to keep the index around or above the 4,000 point level and that too in a highly overbought market,” says an analyst.

The index has risen by 1,000 points during the last about six weeks without any significant sell-off or bear attempts to reverse the trend and restore sanity to stock trading.

Retailers and small savers may have windfall profits in the process but now they are worried over the persistent rise as it could well lead to some massive correction and that will shift them at the receiving end.

“Banks have massive surplus money to invest in the absence of falling corporate demand as capital appreciation in stocks trading is terribly enormous and relatively quick,” brokers said.

Plus signs were strewn all over the list, major gainers being Pakistan Oilfields, Pakistan Refinery, National Refinery, Shell Pakistan, Shell Gas, Packages, Unilever Pakistan, Parke-Davis and Wyeth Pakistan, which posted gains ranging from Rs7.20 to Rs36.90. Many others followed them with smart gains.

Losers were led by Burewala Textiles, BOC Pakistan, Pakistan Services, Security Papers, IGI Insurance and Nestle MilkPak, off Rs3 to Rs14.20.

Trading volume was maintained at the overnight level of 459m shares as gainers held a strong lead over the losers at 273 to 144, with 37 shares holding on to the last levels.

PSO topped the list of actives, up Rs19.60 at Rs280.90 on 47m shares followed by Japan Power, higher 60 paisa at Rs7 on 46m shares,

PTCL gained 45 paisa at Rs. 32.55 on 42m shares, Hub-Power, firm by 10 paisa at Rs40.50 on 40m shares and FFC-Jordan Fertilizer, up 45 paisa at Rs16.90 on 26m shares.

Sui Northern Gas was also actively traded, up one rupee on 21m shares, Fauji Cement, steady five paisa also on 21m shares, T.R.G. Pakistan, easy 20 paisa on 15m shares, Pakistan Oilfields, higher by Rs7.05 on 13m shares and Dewan Salman, up 10 paisa at Rs22.20 also on 13m shares.

FORWARD COUNTER: PSO also led the list of actives on the forward counter and rose by Rs19.80 at Rs283.85 on 13m shares, followed by Hub-Power, higher 20 paisa at Rs41 on 7m shares, FFC-Jordan Fertilizer, up 40 paisa at Rs17.10 on 6m shares, PTCL, higher by 60 paisa at Rs32.95 on 6m shares and Sui Northern Gas, up 90 paisa at Rs36.50 on 3m shares.