KARACHI, June 2: Stocks on Thursday reacted bullishly to the removal of major market irritants working against the investor interests as the easing of the forward trading rules for individual broker, notably the increase in his exposure limit or free float to three per cent from the previous one per cent sent a wave of optimism among brokerage houses.

There was an avalanche of buying offers after the fulfilment of the bourses demand as no one was inclined to miss the bandwagon at the current lower prices amid optimism that the market could regain its lost glory.

The KSE 100-share index, therefore, breached through three consecutive psychological barriers heralding the re-run of a bull market on heavy buying aided by reports of relaxation in forward trading rules.

The KSE 100-share index recovered 302.78 points or 4.31 per cent at 7,322.38 as compared to 7,019.60 a day earlier as all the leading base shares maintained their upward drive under the lead of PTCL, OGDC, PSO and Pakistan Oilfields.

The market capital also soared by Rs81 billion to Rs2,044 billion as heavily-capitalized shares, notably OGDC, PSO, PTCL, Pakistan Petroleum netted fresh sharp gains.

The bourse chiefs and the chairman of the Securities and Exchange Commission of Pakistan (SECP) have, after marathon discussions, finally reached an accord on major stock market demands.

Under the relaxation in future trading rules, free float or exposure limit of an individual broker has been increased to three per cent from the existing one per cent and cash margin demand to 50 per cent from 100 per cent.

But the most important among them could be the rules governing the exit mechanism to suspend trading in a stock if its price falls by five per cent in a session. The bourse chiefs were advised by the SECP chairman not to let market crash in future.

“Now it could well be the turn of bulls to avenge their massive battering,” analysts said. “Major market demands have been met and investors, notably institutional, demonstrated in more than one ways.”

As far as technical irritants were concerned they had been removed, and now the focus would be on the fiscal steps in the new budget due on June 6. But if the rumours of increase in withholding, capital value tax and new tax on broker share income proved correct, investors would think twice before making fresh commitments, they said.

Energy shares again led the market advance as most of them had potential of capital gains followed by fertilizer, cement, gas and leading textile shares.

Among the prominent gainers, Unilever Pakistan and Wyeth Pakistan were leading, up Rs35 and Rs40 respectively. Other good gainers included Arif Habib Securities, Javed Omer, Shell Pakistan, PPL, Dawood Hercules, Parke-Davis, Pakistan Oilfields and PSO, which posted gains ranging from Rs7.75 to Rs18.30.

They were followed by National Bank, United Sugar, OGDC, International Industries, Engro Chemical, Fauji Fertilizer, PNSC, Attock Petroleum, and Millat Tractors, up Rs4.70 to Rs6.70.

Losses on the other hand were mostly fractional barring Attock Cement, IGI Insurance, Fazal Cloth and Sapphire Textiles, off Rs1.90 to Rs4.40 while losers were led by Fazal Cloth and Sapphire Textiles, off Rs3.70 and Rs4.40.

Trading volume showed a modest rise at 369m shares as compared to 357 a day earlier but gainers maintained a strong lead over the losers at 289 to 37, with 30 shares holding on to the last levels.

PTCL top the list of actives, up Rs3.35 at Rs70.85 on 139m shares followed by OGDC, higher by Rs4.80 at Rs101.40 on 77m shares, National Bank, firm by Rs4.70 at Rs98.85 on 25m shares, Sui Northern Gas, steady Rs2.60 at Rs66.10 on 15m shares, Pakistan Oilfields, higher by Rs12.90 at Rs271.60 on 12m shares, and DG Khan Cement, up Rs2.60 at Rs54.75 on 10m shares.

Other actives were led by Pak PTA, up one rupee on 9m shares, Fauji Fertilizer Bin Qasim, higher by Rs1.20 on 7m shares, and Fauji Cement, firm by one rupee also on 7m shares.

FORWARD COUNTER: PSO came in for strong speculative support on the forward counter and rose by Rs18.25 after the relaxation in forward trading rules and was quoted at Rs383.75 on 16m shares.

PTCL followed it, higher by Rs3.40 at Rs71.40 on 14m shares, OGDC, higher by Rs4.75 at Rs99.90 on 5m shares, Pakistan Oilfields, up Rs13.05 at Rs275 on 3m shares and Fauji Fertilizer Bin Qasim, higher by Rs1.25 at Rs26.35 also on 3m shares.

DEFAULTER COS: There was no major change in the previous prices as investors remained busy in the ready section owing to return of a bull market.

Stray business was reported on some of the counters amid fractional price changes on the higher side.