Local, foreign buying helps sustain bull market

There was, however, a brief interruption in the market's run-up caused by the army operation of the Lal Masjid but investors resumed normal activity under the lead of foreign funds followed by a fresh price flare-up on the blue chip counters.

The return of the foreign investors was attributed to the perception that future sailing on the stock market may be smooth after the end of Lal Masjid army operation.

"Investors, notably foreign ones seem to have decided to go by the positive market fundamentals rather than negative fallout of the Lal Masjid operation and the political polarisation after the formation of a grand alliance of the leading political parties sans Pakistan People party to restore democracy in the country", said a floor broker.

But some others said the post-Lal Masjid operation calm points to a belated reaction to and investors should play safe and should not go for speculative forward buying at this stage.

After early rising to week's peak level of 14,288.00 points, the index came in for selling but finished with a sharp rise of 216.44 points at 14,202.23 on late strong speculative buying as compared to last weekend's 13,985.89 points.The free float 30-share index also rose by 66.96 points at 17,102.45.

The KSE 100-share index has been hovering around the coveted level of 14,000 points for the last couple of sessions and last week it crossed it twice but failed to sustain it on late bear onslaught.

The modest rise in the index each session reflects that most of the overvalued shares had reached their saturation points and bulk of the support is now confined to second-liners, mostly in the cement sector, which has massive potential of capital gains owing to over 100 per cent increase in exports.

"The rubicon has atlast been crossed in a scenario not fully conducive to the highly sensitive market", said a leading bull "but he was unsure about its future trend in the political and Lal Masjid tensions".

"What next is now the question being debated among the bulls", analyst Ashraf Zakaria said adding "but the consensus appears to be to further build on the still fragile base of 14,000 points".

"It was a judicious blend of both local and foreign buying linked chiefly to higher corporate earnings and market talk of handsome payout including bonus shares", said a leading analyst Hasnain Asghar Ali.

While the legendary market leaders have been relegated to the secondary positions, low-priced ones in the cement and other sectors have assumed the role of trend setters.