KARACHI, Dec 24: The fears of war with India on Monday halted the last week’s upward drive amid panic selling but the presence of circuit breaker forestalled the market’s possible collapse after the KSE index plunged by 6 per cent or 81 points at 1,323.05.

The opening itself was terribly nervous followed by reports of overnight border skirmishes along the international borders and massive Indian troop build-up and as bad news about the borders situation trickling in selling from weakholders and jobbers intensified.

Many leading brokers claim the market should have collapsed if the KSE authorities had not applied the rule of circuit breaker under which a fall or rise beyond Rs.1.50 in a single session is not allowed to protect the interest of small investors as well as market manipulation by the “big ones”.

However, this was not the largest single-session fall as it has dropped more than once in late 90s above 100 points, the largest being 129 points on various negative news including dismissal of elected prime ministers and no confidence moves against them.

“There were sellers all around but not many buyers allowing the prices to drop like nine pins across the board under the lead of heavily-capitalised shares such as PTCL, Hub-Power, PSO and ICI Pakistan, having a formidable weightage in the index,” stock analysts at the W.E.Financial Services said.

An idea of war fears followed by massive panic-selling on the local market may well be had from the fact that it battered the index by 81 points, while its Indian counterpart Bombay Stock Exchange index showed only a modest decline of 12 points, they added.

“The steep decline just on reports of massive Indian troop build-up and border tension, speaks of the vulnerability of the KSE and weak footing on which it is operating and the strength of its Indian counterpart,” stock analysts at the Ali Hussain Rajabali Securities said.

“It also reflects that war with India may not be around despite reports of war phobia as there is no panic among the investors there,” they say.

What seems to have created panic in the market was the rumour that foreign investors are getting out of the market in a bit haste, which the locals have taken as a prelude to an imminent war. Foreign investors generally resort to panic selling in war-like conditions.

“Unlike the previous market destabilisers, the money did not outflow to dollar, although it ruled strong on some other counts and so did gold,” brokers said.

It was in this background that the broader market showed widespread losses, while the pivotal, notably the index shares received massive battering under the lead of leading base shares, the largest decline of Rs.2.70 and 6.35 being in ICI Pakistan and PSO respectively.

Minus signs dominated the list under the lead of energy and some foreign shares under the lead of PSO, Shell Pakistan, Al-Ghazi Tractors, BOC Pakistan, Engro Chemical, Adamjee Insurance, Fauji Fertilizer and Glaxo-Wellcome Pakistan, off Rs.2.20 to 8.55, largest decline being in Shell Pakistan.

But the largest decline of Rs.20 was recorded in Grays of Cambridge followed by Lever Brothers, down Rs.11.00. All other leading shares also fell in unison.

Among the 13 gainers, Dewan Mushtaq Textiles, Abbas Engineering and Wah Noble Chemical were leading, up by one rupee to Rs.1.38, while others rose fractionally.

Trading volume did not keep pace with the mounting selling offers in the absence of buyers and rose modestly to 89m shares as losers forced a strong lead over the gainers at 134 to 13, with 41 holding on to the last levels.

PTCL topped the list of most actives, off Rs.1.50 at Rs.14.65 on 32m shares followed by Hub-Power, lower Rs.1.45 at Rs.16.95 on 30m shares, PSO, sharply lower by Rs.6.35 at Rs.95 on 6m shares, Sui Northern Gas, off Rs.1.15 at Rs.8.80 on 4m shares and ICI Pakistan, down Rs.2.70 at Rs.39.35 on 3m shares.

Other actives were led by Engro Chemical, off Rs.4.25 on 2.197m shares, MCB, lower Rs.1.70 on 1,737m shares, Fauji Fertilizer, easy Rs.2.20 on 1.641m shares, FFC Jordan Fertilizer, lower 55 paisa on 1.273m shares and Nishat Mills, down Rs.1.50 on 1.205m shares.

FUTURE CONTRACTS: Speculative issues on the forward counter also received massive battering in line with steep decline in their ready counterparts and finished at their career-lowest levels on persistent war-related selling.