The KSE 100-share index breached through the barrier of 5,550 points as a snap weekend rally raised the hopes of a robust opening next week thus leading to fresh records both in terms of index and single session volume.

In general market parlance, the weekend run-up could well prove a trend-setter for market during the next week and that was perhaps why there was a sense of optimism among the bulls and a good bit of disappointment in bears.

Led by the energy sector, notably the Pakistan Oilfields on short-covering generated by new oil finds and perceptions of higher earnings, some other groups notably banking, textile, fertilizer and cement joined the race, pushing market out of the current hesitancy.

Stocks, therefore, ended the last week on a firm note as financial investors played significant role to pull the market out of the current impasse. The underlying sentiment remained uppishly inclined - thanks to positive basic fundamentals. But the strong weekend rally altogether changed the future market outlook as analysts predicted a run-up beyond the crucial index level of 5,550 points. After several abortive attempts, the barrier was finally broken as it ended the week up by 36.70 points at 5,556.87 as compared to the previous 5,520.17 points. The market capital also rose by Rs15 billion at Rs1,548 billion.

Its forward march to a widely speculated index level of 6,000 may still be an elusive goal but the breach of 5,550-point barrier indicates that its future sailing towards the target may be pretty smooth.

Although the Prime Minister's Indian visit was without any fixed agenda of talks, it certainly reinforced the perception that the current peace overtures could lead to normalization of political and economic relations between the neighbours in coming months. The issue of the Iranian gas pipeline was debated between the leaders and some positive outcome was expected to emerge in due course, brokers said.

After moving either-way, the KSE 100-share index finally managed to finish above the crucial level of 5,500 points as leading base share, notably the PTCL, the OGDC, the PPL, the Hub-Power and the PSO rose from their previous lower levels.

"The market may have some irritants, notably on political front, but the near-term outlook appeared bullish as heavy cash amounts were ready for investment in shares", analysts said adding "it was in this background that the initial weakness triggered strong buying later in the week.

The corporate outlook appeared to be pretty encouraging in the backdrop of higher pay-outs announced by some leading companies including the BOC Pakistan, final cash at 100 per cent and final 300 per cent by the Siemens Pakistan. But most stimulating announcements were from the hereto neglected textile shares, indicating a bullish turn in their corporate earnings and exports. While the Island Textiles announced a cash payout of 25 per cent, Salfi and Tata Textiles came out with 10 per cent cash and bonus shares of the same amount, and 15 per cent bonus shares, respectively.

Predictions of higher dividend announcements from the textile sector for the year ended Sept 30,2004, could intensify further the current moping operations in this sector and being the largest listed group it could keep the entire market in a good shape also.

Stocks on Monday turned mixed as a section of investors took profits at the inflated levels but the broader market performed credibly well on renewed short-covering on selected counters.

Weakness of the oil sector and some other blue chips earlier weighed heavily against the underlying sentiment as bears outwitted the bulls on more than one counters in the absence of institutional traders.

Higher carryover rates, which on last Friday soared to 14 per cent from the previous about nine per cent was said to be the chief worry of investors and some of them indulged in selling to meet their delivery obligations.

On technical grounds also the market needed correction after having risen beyond its mandate both in pre and post-Eid trading sessions on strong financial support which came in the form of profit-selling from the weak holders and some leading investors.

"Political worries in the backdrop of opposition's anti-uniform drive did take their toll on some counters as jobbers and weak holders tried to square their long positions, the general perception was that the sailing on stock market will remain pretty smooth on the strength of some other positive factors", some analysts feared. But some others said the current massive peace overtures by Pakistan to secure peace with India could well prove a sustaining factor behind any renewed run-up initiated by the financial traders or bargain-hunters.

"The privatization of two mega state-owned units, the PTCL and the PSO during next couple of months could keep the market in a good faith", said a leading broker adding "having about 20 per cent weightage in index, both may not allow the market to fall below the current level. The Privatization Commission had already invited the Expression of Interest (EOI) by January 28 next from prospective investors.

Leading gainers were led by the HinoPak Motors, the Colgate Pakistan, the Gillette, the Al-Abbas Sugar, the Quetta Textiles, the Sapphire Fibre, the Gatron, the Treet Corporation, and the Dawood Lawrence followed by the Berger Paints, the Grays of Cambridge, the BOC Pakistan, the Zulfiqar Industries and the Unilever Pakistan. But the largest gains were noted in the Parke-Davis, the Wyeth Pakistan, the Shell Pakistan, the National and the Pakistan refineries followed by the PSO and other pivotals.

Losers were led by the Pakistan Services, Millat Tractors, Artistic Denim, Fazal Textiles, Bhanero Textiles, the IGI Pakistan, Javed Omer, Shezan International and the EFU Life which suffered fall. The Atlas Honda, Atlas Battery, the BOC Pakistan and some others also fell on late selling.

FORWARD COUNTER: Speculative issues on the forward counter also rose from the previous level under the lead of Pakistan Oilfields, the Engro Chemical, and the Fauji Fertilise Bin Qasim, the OGDC, the PSO and some others amid active trading. The PTCL, the PSO, the PPL and some others also finished with good gains amid large volume.