KARACHI, Oct 4: Stocks on Monday maintained an optimistic outlook as dividend-driven rally manifested itself in a bigger way followed by steady inflow of investment buying support.

The KSE 100-share index rose by 21.30 points at 5,267.21, adding Rs5.021 billion to the market capital at Rs1,500.141 billion. However, leading bears kept to the sidelines most of the time anticipating further rise in prices and covered positions on selected counters rather than taking profits at the inflated levels.

"Badla related fears again proved an inhibiting factor as a section of investors think there could be a lot of selling by some of the investors to square positions", some analysts predicted.

The KSE 100-share index posted a fresh rise of 21.39 points at 5,267.21 after hitting the day's best level at 5,285.33 during the mid-session but late-selling in some of the leading base shares allowed it finish with clipped gains.

Apart from perceptions of local higher selling prices, the other factor, which generated a lot of fresh buying in the energy sector, was reports of sell-off of PSO before the year is out after the floatation of Kot Addu Power's shares for public subscription by the end of the current month.

Although traded volume suffered sharp contraction in the absence of strong buying by the institutional traders, punters remained active buyers on selected counters amid reports of higher dividend by some of the leading companies whose board meetings are due during the current week.

Cement shares followed the energy sector as 50 per cent bonus shares by Kohat Cement triggered a lot of short-covering in some low-priced ones in anticipation of higher capital gains.

"The market is progressively treading to its pre-reaction level, of course, after consolidating initial gains", analysts said "its next target appears to be 5,500 before the holy month of Ramazan".

Higher dividend by both the leading companies and their junior partners has changed the investor perceptions about the future share business outlook as was reflected by a substantial increase in the daily volumes indicating that investors have chosen to live with the Capital Value Tax (CVT).

"The CVT is now not a bearish market factor", one broker said "either the prime minister has given some assurance to the high-ups of the three bourses on its revision at a later stage or investors are considering it an essential levy".

Leading gainers were led EFU General, Artistic Denim, Haroon Oils, Al-Ghazi Tractors, Security Papers, Shell Pakistan, Treet Corporation and AKD Securities, which posted gains ranging from Rs5 to Rs12.70. But the largest gain of Rs77 was recorded in Wyeth Pakistan owing to the absence of its floating stock. Promient losers included IGI Insurance, Lakson Tobacco, Pakistan Engineering, Pakistan Cables, Ferozsons Lab, National Food and Packages, off Rs4 to Rs8.15.

Trading volume fell from the weekend level of 316m to 243m shares but gainers maintained a strong lead over the losers at 200 to 141, with 42 shares holding on to the last levels.

The most active list was led by OGDC, unchanged at Rs64.60 on 46m shares followed by National Bank, up by Re1 at Rs70.20 on 29m shares, PTCL, steady five paisa at Rs43.75 on 22m shares, Fauji Cement, up by 20 paisa at Rs15.80 on 17m shares and Askari Bank, higher by 75 paisa at Rs83.75 on 13m shares.

Other actives were led by PSO, which was quoted ex-dividend at Rs249.50, up by Rs4.60 on 12m shares, D.G.Khan Cement, lower 40 paisa on 10m shares, Hub-Power, up by 90 paisa on 9m shares, Bank of Punjab, higher by Rs2.46 on 8m shares and Lucky Cement, firm by 20 paisa on 7m shares.

DEFAULTER COS: Active trading was also witnessed on this counter as some of the leading shares came in for active short-covering under the lead of Quice Foods, up by 20 paisa at Rs4.50 on 0.221m shares followed by Awan Textiles, higher by 50 paisa at Rs2.25 on 0.183m shares and Dandot Cement, lower 20 paisa at Rs10.50 on 0.138m shares.