KARACHI, Sept 3: Stocks on Tuesday were back on the rails as heavy buying in the energy sector evoked strong sympathetic support on the other blue chip counters, enabling the index to fully recoup the overnight loss of 22.03 points at 1,974.61.

There was a virtual run on the energy shares under the lead of Shell Pakistan, which added another Rs14 to overnight rise of Rs5.30 on the perception that deregulation of diesel could significantly add to the earning of all the energy shares, notably PSO, Pak Oilfields and Shell Pakistan.

But on the other hand food shares remained under pressure under the lead of Rafhan Maize, Lever Brothers and Nestle MilkPak and fell further, although earning perceptions were positive for the current year.

“The market is readjusting itself to the new corporate realities as leading investors are taking long positions where due and for good reasons too”, says a leading stock analyst “the recent dividend announcements from some of the mega issues including PSO has altogether changed the future market outlook”.

The snap rebound of the index reflects this phenomenon and those who could look a little farther are very much in the arena and are in a fighting mood too, he adds.

The KSE 100-share index recovered the overnight loss of 22.03 points and was quoted at 1,974.61 but is still far below the Monday’s early strong speculative buying in leading base shares, which briefly pushed it to breach through the barrier of 2,000 points.

Whether or not the index could stay above the 2,000 point level will largely depend on the rate of final dividend by the management of Hub-Power in its board meeting on Wednesday. However, indications are that the developing corporate scene reflects that the target may now not be that ambitious.

“The chain of corporate announcements due after Hub-Power and the presence of strong institutional and foreign support in the leading base shares could do the needful”, says a leading analyst adding the “job appears to be now more easy as it has already cross the Rubicon after about three years”. Rebidding for the sell-off of United Bank also proved an aiding factor.

Floor brokers said the snap rally owes its strength to heavy buying in Hub-Power ahead of its board meeting on Wednesday and market talk of a higher final dividend. It evoked a lot of sympathetic short-covering on some other blue chip counters, enabling the market to shrug off the overnight easiness.

All the pivotals and leading stocks, which ran into profit-selling a day earlier were back on their pre-reaction levels under the lead of PSO and Shell Pakistan, which rose recovered Rs2 but Shell Pakistan posted a fresh gain of Rs14 on investors perceptions of higher sales after the deregulation of diesel.

Leading gainers were led by Attock Refinery, Millat Tractors, Pakistan Oilfields and Parke-Davis, up by Rs4.25 to Rs28.10, followed by Shafi Textiles, Pakistan Refinery, Colgate Pakistan, Reckit and Benckiser and Pakistan Oilfields, which posted gains ranging from Rs2.30 to Rs11.85.

Losers were led by Wyeth Pakistan, which finished with an extended fall of Rs25 followed by Bata Pakistan, Nestle MilkPak, Sitara Chemicals, Atlas Honda, Kohinoor Weaving, Lever Brothers, Rafhan Maize Products, Pak Reinsurance Company which suffered fall ranging from Rs1.75 to Rs5.

Trading volume fell to 163m shares from the previous 187m shares as losers held a modest lead over the gainers at 121 to 119, with 70 shares holding on to the last levels.

Hub-Power was actively traded, up 25 paisa at Rs28.25 on 53m shares followed by PTCL, higher 15 paisa at Rs19.70 on 23m shares, PSO, up Rs1.80 at Rs199 on 19m shares, Pak PTA (right spot), unchanged at 0.05 paisa on 13m shares and National Bank, up 60 paisa on 10m shares.

Other actives were led by Pak PTA, up 50 paisa on 8m shares, Dewan salman, higher by 50 paisa on 7m shares, FFC-Jordan Fertilizer, steady by 30 paisa on 3.430m shares, Bank of Punjab, up 55 paisa on 3m shares and Sui Northern Gas Company, higher 40 paisa on 2.867m shares.

FORWARD COUNTER: Hub-Power also came in for active speculative support on the cleared list and rose by 30 paisa at Rs28.40 on 12m shares followed by PTCL, unchanged at Rs19.85 on 5.226m shares and PSO, higher 90 paisa at Rs200.65 on 4.479m shares.