KARACHI, Jan 28: Stocks on Tuesday again ran into profit selling at the inflated levels as investors hastened to get out of the market after unloading their long positions, pushing the KSE 100-share index lower by 89.60 points or 3.26 per cent at 2,657.25.

The selling is partly attributed to the absence of follow-up and partly to a belated reaction to the Iraq situation and fears of war in the backdrop of UN inspector’s report on nuclear weapons.

Energy shares, which received massive battering in unison led the market decline followed by other blue chips on the other counters including Fauji Fertilizers and Engro Chemicals, many of them finishing below their lower circuit breaker both in the ready and forward counters.

Unlike the overnight outstanding performance, the KSE 100-share index showed highly erratic movements but managed to finish higher from the day’s low after it fell by 112 points at one stage. The final closing was a bit better at 2,657.25, the net loss over the day being of the order of 89.60 points. The market capitalization fell by Rs18.266bn at Rs585.558bn from Rs603.824bn a day earlier.

The sell-off in most of the pivotals was further accelerated in sympathy with steep decline in the global bourses amid war fears as investors tried to get out of market rather than reinforcing the overnight run-up.

Rumours about the postponement of second pre-bid meeting for the sell-off of PSO to the third week of the next months also generated a lot of selling in its share, which also took it toll in some other market leaders including Shell Pakistan and other leading energy shares.

“But follow-up terribly lacked even on the blue chip counters as the leading institutional traders turned active sellers rather than buyers at the dips,” brokers said.

The selling appears to be tactical as a section of leading operators is inclined to push prices further lower on selected counters ahead of their board meetings during the next couple of days and then to buy at the lower levels, they said.

Analysts said war fears in the Gulf are there but there is no possibility of the US attack before the end of February and till then investors could play safe aided by local positive fundamentals.

“When there are no genuine negative news to create panic on the market some fertile minds create some to tilt the price trend in their favour,” they said. “That is what is exactly happening for the last couple of sessions.”

The snap reaction signals that the direction of the market is unclear for the near-term. But some hope that higher dividend from Engro Chemical and Fauji Fertilizer could sustain the current market stance.

Minus signs dominated the list under the lead of National Refinery, Pakistan Refinery, Pakistan Oilfields, PSO and Shell Pakistan, off Rs5.10 to Rs10.60, largest post-dividend decline of Rs19.95 being in Shell Pakistan at Rs383.05.

Other major losers included Javed Omer, Lakson Tobacco, Attock Refinery, Indus Motors, Clariant Pakistan, Fauji Fertilizer, BOC Pakistan, Wyeth Pakistan and Nestle MilkPak, off Rs3 to Rs5.

A couple of shares managed to show gains above one rupee under the lead of Accord Textiles, Balochistan Wheels, Dawood Hercules, 11th, 20th ICPs, Arif Habib Securities, N.P. Spinning, Crescent Textiles and Siemens Pakistan, up Rs1.50 to Rs12.95.

Trading volume fell to 349m shares from the previous 363m shares as losers forced a strong lead over the gainers at 223 to 80.

Hub-Power led the list of actives, lower Rs1.60 at Rs36.20 on 88m shares, followed by FFC-Jordan Fertilizer, up 30 paisa on reports that Fauji Fertilizer is expected to take some stake in it, on 67m shares, PTCL, off 65 paisa at Rs23.70 on 65m shares, Engro Chemical, lower Rs1.10 at Rs93 on 20m shares and PSO, off Rs10.60 at Rs201.65 also on 20m shares.

Other actives were led by Pak PTA, easy 45 paisa on 12m shares, ICI Pakistan, off Rs1.85 on 12m shares, Sui Northern Gas, lower Rs1.15 on 10m shares, Fauji fertilizer, off Rs4.25 on 8m shares and National Bank, easy Rs1.35 on 6m shares.

FORWARD COUNTER: Speculative issues on the forward counter also followed the lead of their ready counterparts and suffered sharp fall under the lead of PSO, which was off Rs10.60 and Rs10.30 in both the settlements. It ended at Rs202.21 on 6m shares.