KARACHI, March 12: Stocks on Wednesday staged a robust rally on active buying in the leading base shares, pushing the KSE 100-share index well above the psychological barrier of 2,500 points at 2,540.25 amid a briskly traded session.

Analysts said it was a spectacular performance viewed in the backdrop of the Gulf situation and reflects a positive response to the prime minister’s overnight speech outlining his economic priorities and the continuation of the previous reforms.

Investors, however, did not go beyond the safe havens and remained confined to the energy and auto sectors followed by reports of higher earnings and market talk of a enhanced dividend.

But the snap rally gave a pleasant surprise to both leading analysts and brokers as most of them were expecting the exit of retailers owing to weekend considerations. The strong advent of institutional support changed the entire share business outlook.

The KSE 100-share index rose by 58.24 points or 2.35 per cent at 2,540.25 as compared to previous 2,482.01 points as all the leading bases shares finished with robust rallies.

The total market capitalization also rose by Rs11.829bn to Rs577.398bn as compared to Rs565.569 billion a day earlier as all the heavily capitalized shares, notably PTCL, Hub-Power and PSO rose sharply higher.

The oath-taking by the newly elected senators despite earlier rumours of boycott or agitation by the opposition and the prime minister’s no-vote on Iraq war for US could be one of the reasons behind the optimism of the big ones, one broker said otherwise in market parlance, pre-holiday sessions generally attract a lot selling.

The putting of a cap on maximum rates of carryover transactions to 18 per cent from the previous 50 per cent on 30 volume leaders may be the other positive development for others who could peep through the future.

This optimism may prove short-lived as the US has already indicated to go alone on Iraq irrespective of the votes or UN resolution and refuse to extend the March 17 deadline.

“The future market direction will be largely guided how the US views Pakistan’s perception of abstaining when anti-war voting is ordered by the UN Security Council,” analysts said. “Will Pakistan be in a position to say a firm no but its past record tells a different story.”

The current market rise could be deceptive and speculative and is fraught with high risk, they said adding “investors should think twice before riding the bandwagon.”

Energy shares again led the market advance under the lead of Pak-Suzuki Motors, PSO, Shell Pakistan, Pakistan Oilfields and Unilever Pakistan, which posted gains ranging from Rs4.75 to Rs19.95.

Other prominent gainers included ICPSEMF, Century Insurance, National Refinery, Pakistan Refinery, Atlas Battery, Honda Atlas, Indus Motors, Pak-Suzuki Motors, Glaxo-Wellcome and Dawood Hercules, which posted gains ranging from Rs2.05 to Rs4.10.

Losers were led by Security Papers, New Jubilee Insurance, Bhanero Textiles BOC Pakistan and Wyeth Pakistan, off Rs1.70 to Rs28, the largest decline being in Wyeth.

Trading volume rose to 179m shares as gainers held a strong lead over the losers at 182 to 42, with 42 shares holding on to the last levels.

Hub-Power led the list of actives, up 70 paisa at Rs36.05 on 51m shares, PSO, higher by Rs5.65 at Rs202.40 on 25m shares, PTCL, up 45 paisa at Rs21.70 on 15m shares, FFC-Jordan Fertilizer, higher 70 paisa at Rs10.90 also on 15m shares and Sui Northern Gas, up 80 paisa at Rs22.65 on 13m shares.

Other actives included Dewan Farooq Motors, higher by Rs1.10 on 8m shares, Engro Chemical up Rs1.30 on 7m shares, Pak PTA firm by 45 paisa also on 7m shares, Bosicor Pakistan, steady 35 paisa on 6m shares and MCB, up 65 paisa on 4m shares.

FORWARD COUNTER: PSO came in for strong support at the overnight lows and recovered to close higher by Rs6.10 at Rs202.80 on 10m shares followed by Hub-Power, higher 85 paisa at Rs36.15 on 11m shares and PTCL, up 45 paisa at Rs21.70 on 4m shares.