Stocks maintained their winning streak during the last week as investors continued to build up long positions almost on all counters, followed by the prediction of a sustained price flare- up in the weeks to come.

Moreover, low trading volumes indicated that the bears were also playing a safe game, and were firmly holding on to their positions in an apparent effort to sell at higher grades.

A positive outcome of the Islamabad Saarc summit and a major breakthrough in the Indo-Pakistan relations did reinforce the investor-perception of a buoyant future market. Likewise, leading among them were not inclined to miss the bandwagon and rode it according to their insight.

The market's relative strength was also evident from the fact that it confidently absorbed the negative impact of some adverse news, including, delay in the final bidding date of the PSO.

The perception that the Islamabad declaration would boost intra-regional trade in a low tariff area, along with increasing economic cooperation among the Saarc members acted as aiding factors.

Yet, what seemed to have encouraged the investors to make long-term buying in most of the low-priced shares - having potential of capital appreciation - was the perception that the peace with India after settlement of some core issues could give a tremendous boost to stock trading.

"I don't rule out the possibility of the advent of foreign investors in some of the MNCs", claimed a leading broker, adding, "the PSO, the Hub-Power and some gas shares were the main targets".

Led by the institutional traders, most of them, including the retailers, indulged in massive short-covering operations on the selected counters thus lifting the KSE 100-share index well beyond the coveted level of 4,500 points at 4,570.15, up 96.22 points from the previous week's 4,473.93.

The market capital also showed an impressive increase - thanks to active buying in most of the massively-capitalized shares, notably the Hub-Power, the PTCL, and some others. It rose to 976 billion as compared to Rs954 billion, a week earlier.

Investors were now eyeing the index level of 5,000 points on the strength of stepped up peace overtures with India, and a relative calm on the local political front, after the government- MMA deal and vote of confidence for President.However, a mid-week negative news on the PSO privatization front slowed down the market's upward drive and triggered a lot of selling in the PSO and some other leading energy shares.

Reports that the Kuwait Supreme Council had advised the Kuwait Petroleum Company (KPC), one of the short-listed companies for final bidding for the purchase of controlling shares of the Pakistan State Oil (PSO), to "further study into possible investment in Pakistan's retail fuel market", triggered active selling in its shares amid fears of further delay in the final bidding. However, the selling was psychological rather than real and as other basic fundamentals were bullish, investors would continue to ride the bull bandwagon in the sessions to come, brokers said.

Investors on Monday resumed new year buying encouraged by the positive signals from Islamabad Saarc, notably the much-awaited Musharraf-Vajpayee meeting and its likely impact on the normalization of relations between the two neighbours.

"The total peace with India may still be an elusive goal but the current peace overtures from both sides have raised hopes of peace and settlements of some core issues, including Kashmir.

The current adverse world comments on the Pakistan's nuclear programme and a delay in the PSO final bidding date took their toll in the form of late selling at high levels.

Apart from other positive developments in the summit, what seemed to have reinforced peace perceptions among the investors was the Vajapayee-Musharraf meeting allaying earlier fears that the former may not meet the latter.

Indications that the current peace moves to normalize relations between the two countries were expected to boost the stock trading in the coming sessions, as investors were looking for positive results.

"The settlement of Kashmir issue may not be around but a good beginning had been made to resume talks on some intriguing matters keeping both the neighbours on war footing", said an analyst.

Investors led by the financial institutions rushed to cover their positions at lower levels, mostly in cement, fertiliser, energy and some secondliners.

"Aided by the expectations of a positive Saarc summit outcome, the other contributory factor was the debut of the new year's buying, though remaining indecisive in the last couple of sessions", brokers said.

Blue chips such as the PTCL, Dawood Cotton, Engro Chemical, Sui Southern Gas - controlling shares of which will be sold at Rs26.00 per scrip during the next couple of weeks - and some other leading shares were in the forefront of advancing issues.

Moreover, chief gainers were led by the Dawood Hercules, the Unilever Pakistan, and the Nestle MilkPak, followed by the Jahangir Siddiqui and Co, the Burewala Textiles, the Pakistan Refinery, the National Refinery, the IGI, the EFU Life, the Pak- Suzuki Motors, the Millat Tractors, the Bhanero Textiles, the Colgate Pakistan, the Dawood Cotton, the Pakistan Tobacco, the Pakistan Oilfields, the Kohat Cement, the Crescent Steel, the Century Papers and the Indus Motors along with several others.

Prominent losers were led by the Gatron Industries, the Blessed Textiles, the Shell Pakistan, the Pakistan Cables, the Parke-Davis, the Wyeth Pakistan, the Rafhan Maize, the Abbott Lab. Nevertheless, leading among them were the Clariant Pakistan, the Grays of Cambridge, the Island Textiles and some others, but the mid-week covering purchases allowed them to finish partially recovered.

FORWARD COUNTER: With the exception of the PSO, which remained under pressure followed by the reports of delay in its final bidding date, and fell by Rs6.50 at Rs281.50, rest of the active speculative issues tended higher under the lead of the OGDC and the PTCL. The MCB, Engro Chemical and Ibrahim Fibre with few other also finished on the higher side.