Harare — STOCKS traded inside a tight range this week as investors bagged the gains of last week's bargain hunting and returned to the sidelines.

The market opened the week 0.91 percent higher, carried by heavyweights Old Mutual and Delta. But the big caps met mixed fortunes on Wednesday, leading the main industrial index to a fractional 0.15 percent midweek loss. Early yesterday, the market was quoted flat to lower, a sign, analysts said, of mixed sentiment on the market.

Dealers expect the market to drift around current levels - the 3 million point mark - as it struggles for direction ahead of new inflation data expected next week, and the long-awaited monetary policy statement. Reserve Bank of Zimbabwe (RBZ) boss Gideon Gono has pushed back his statement to allow for further consultation, according to weekend press reports.

"There are a lot of issues on the front burner that we need to get out of the way before we start seeing people committing themselves to firm, long positions on the market," a broker told The Financial Gazette after first call yesterday.

A broad rate hike is widely expected, but market players speculated yesterday that the central bank may want to study latest Central Statistical Office (CSO) annual inflation numbers before it can release its policy statement. The last inflation report came in poorer than expected, stoking talk of a rate hike.

The rate hike speculation caused carnage a fortnight ago, wiping nearly 20 percent off the ZSE's value inside four days. However, a mini recovery came last week as investors bought in the dips.

"Smart investors are scouting for opportunities when other investors think the stock market has gone to sleep," analysts at Fidelity Life Asset Management said then.

"So many investors are following this strategy with the belief that the stock market will re-rate any time. If there is any re-rating, the cost of their portfolios would be lower than before, resulting in better gains."

There was little corporate news to stir the market. PG Industries (PGI) was up $5 to $265 on Tuesday after the company announced the sale of its manufacturing units to further pare costs and return to profit after declaring worse than expected earnings for 2004. PGI, the country's largest maker of building materials, will sell Zimboard and Plate Glass to remain solely a merchandiser of building supplies.

Ariston was down $60 to $480 yesterday after the tea and coffee exporter reported earnings per share in the March half year down to $13.61 from $23.17 in the corresponding period last year.

On the money market, deposit rates firmed across the board despite an improved liquidity position.

A 181-day $200 billion TB tender floated on Wednesday found no takers. RBZ issued two 91 day $200 billion TB tenders, with $47 billion and $27.9 billion respectively being allocated at 95 percent.