KARACHI, March 10: Stocks on Monday turned in a highly erratic performance as leading investors played on both sides of the fence because of heating up of the political scene after the opposition has taken a rigid stand on the LFO and fears of Iraq war. The KSE index recovered 3.26 points at 2,452 after falling by 47 points in earlier trading.

Investor fears, that the opposition-government confrontation over some most vital legal issues could take an ugly turn any day, did not allow normal trading despite prime minister’s statement that LFO issue may be resolved during the next two days.

After earlier falling by 47 points at 2,401.52, the KSE 100-share index staged a snap rally later on active short-covering in some of the leading base shares under the lead of PSO followed by some positive developments on its sell-off. It finally finished with a modest rise of 3.26 points at 2,451.92 but analysts doubt its viability beyond this level at least for the near-term

“The signs of political instability are there after the Opposition is all out to do away with the LFO,” analysts fear. “Any thing could happen if the contenders do not opt for give and take.”

The MMA, which has staged two successful million anti-war march in Karachi and Rawalpindi in 10 days is not deterred by the veiled threats from the official quarters about the end results and intend to carry out its campaign until the government amends or withdraws the LFO.

Good news of a record rise in the forex reserves to $10 billion ahead of the target period, surplus floating liquidity because of lower bank mark ups and increase in industrial productivity should have generated a lot of fresh covering purchases but investors generally decided to play safe.

A long weekend ahead as the stock market will close from Wednesday on account of Ashura and will reopen next Monday also worked against the sentiment as investors liquidated their long positions rather than adding to their portfolios at the falling prices.

“The looming clouds of war on Iraq is also one of the major depressants as investors would not like to hold long until the world opinion against the war deter the US to follow the UN advice,” analysts said.

A considerable decline in the daily turnover figures are reflective of the current market concerns amid fears that the Gulf war may change the future economic outlook, notably for the weaker and developing economies the world over.

“No need to become speculative trader at this crucial time,” one broker cautions his clients. “The current lower levels are certainly provides an attractive bait for any prospective investor but the risk involves are much higher.”

Leading gainers were led by Shell Pakistan, New Jubilee Insurance, Sana Industries, PSO and Unilever Pakistan, up by Rs3 to Rs18, followed by Tata Textiles, Dreamworld, Pakistan Telephone, Habib Insurance, ICP SEMF and Pakistan Refinery, up Rs1.50 to Rs1.95.

Losers included 4th ICP Mutual Fund, Javed Omer Vohra, Dawood Hercules, Lakson Tobacco, Javed Omer, BOC Pakistan, Engro Chemical, Orix Leasing and Pakistan Reinsurance Company, off Rs1.20 to Rs4.45.

Trading volume remained light at 80m shares as compared to 82m shares at the weekend as losers maintained a strong lead over the gainers at 145 to 67, with 37 shares holding on to the last levels.

PSO topped the list of actives, sharply higher by Rs11.15 at Rs201.65 on 29m shares followed by Hub-Power, easy five paisa at Rs34.90 on 18m shares, PTCL, also lower by the same amount at Rs20.90 on 9m shares, Engro Chemical off Rs1.45 at Rs89.50 on 5m shares, Bosicor Pakistan, up 45 paisa at Rs11.45 on 4m shares, Sui Northern Gas, lower 10 paisa at Rs20.90 on 2m shares and ICP SEMF Mutual Fund, higher by Rs1.95 at Rs32.75 on 2m shares.

Other actives were led by FFC-Jordan Fertilizer, easy 20 paisa on 2m shares, Pak PTA, lower 15 paisa on 1.189m shares and MCB, off 55 paisa on 0.757m shares.

FORWARD COUNTER: PSO also came in for strong covering purchases on the forward counter and ended higher by Rs11.50 on 14m shares followed by Hub-Power, unchanged at Rs34.90 on 7m shares, PTCL, lower 15 paisa at Rs20.95 on 4m shares, FFC-Jordan Fertilizer, easy 15 paisa at Rs10.20 on 5m shares and Engro Chemical, unchanged at Rs79 also on 5m shares.